Review

After a brief review of key developments in application of monetary theory to policy analysis, the author describes the central aspects of the typical framework used to analyze monetary policy rules.

The relatively recent resumption of large international capital flows and the Asian crisis have revived interest in capital controls—taxes or restrictions on international transactions in assets like stocks or bonds.

Off-site surveillance involves using financial ratios to identify banks likely to develop safety-and-soundness problems. Bank supervisors use two tools to flag developing problems: supervisory screens and econometric models. Despite the statistical dominance of models, supervisors continue to rely heavily on screens.

Supplement to “The Role of Supervisory Screens and Econometric Models in Off-Site Surveillance” by Mark D. Vaughan, Andrew P. Meyer, and R. Alton Gilbert in this Review issue. The supplement provides a table with evidence about the downgrade prediction record of individual supervisory screens.

Supplement to “The Role of Supervisory Screens and Econometric Models in Off-Site Surveillance” by Mark D. Vaughan, Andrew P. Meyer, and R. Alton Gilbert in this Review issue. The supplement provides additional panels for Figure 5.

The author reviews the recent evidence on the long-run neutrality and superneutrality of money. He restricts his attention primarily to several papers assessing the time-series evidence using techniques due to Fischer and Seater (1993) and King and Watson (1997).