The Capitalism and Freedom in the Twenty-First Century Podcast Peter Ireland (Boston College Econ Prof) on Monetary Policy, Monetarism and New Keynesian Models
May 24, 2024
Peter Ireland, a leading monetary economist and Boston College professor, dives deep into the evolution of monetarism and New Keynesian models. He discusses the influences of empirical macroeconomics and the Phillips curve's challenges in today’s economic landscape. Peter also explores why quantitative easing fell short in boosting inflation post-2008, alongside debates on why central banks should track monetary aggregates. He shares insights from his experience with the Shadow Open Market Committee, celebrating its 50-year mission of advocating for sound monetary policy.
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Richmond Fed As Training Ground
- Peter describes his Richmond Fed experience as a second round of professional training with influential colleagues like Marvin Goodfriend.
- That environment taught him to connect academic models to policymakers' concrete questions.
Models Shape Policy Dialogue
- New Keynesian DSGE models influence central bank strategy by linking inflation and output stabilization through the Phillips curve.
- Having PhD economists on policymaking committees helps apply academic insights to real-world policy decisions.
Empirics And The Phillips Curve Problem
- Empirical macroeconomics is expanding with disaggregated data, heterogeneous agents, and textual 'big data' sources.
- Phillips curve instability remains a major challenge for models that rely on it.
