Review

This study has three parts. The first is a reexamination of what monetarism and the St. Louis empirical representation thereof contributed. In particular, what controversies of the late 1960s and 1970s now can be considered settled? 

Commentary on "Monetary Aggregates, Monetary Policy and Economic Activity" by Robert H. Rasche.

The author discusses why central banks have been established, their bias toward inflation, and the importance of independence and accountability to their effectiveness. He also argue that zero inflation should be the dominant objective of a central bank and that current efforts to coordinate monetary policies are likely to conflict with that objective.

Commentary on "Views on Monetary Policy" by W. Lee Hoskins.

Are U.S. business firms capable of success in highly competitive world markets? The question is embedded in hotly debated calls for the United States to develop an explicit industrial policy; in frequently expressed concerns about our loss of market leadership in the computer chip, television, and automobile industries; and in charges of excessive executive compensation.

Commentary on "Financial Regulation and the Competitiveness of the Large U.S. Corporation" by Harold Demsetz.

Part I of the article defines the concept of an ideal econometric model and argues that to tell whether a model is ideal, we must test it against new data—data that were not available when the model was formulated. Such testing suggests that econometric models are not ideal, but are approximations to a changing reality. 

Commentary on "Assessing Applied Econometric Results" by Carl F. Christ.

Commentary on "Assessing Applied Econometric Results" by Carl F. Christ.

This article reconsiders experience under flexible exchange rates. The author first summarizes the claims about flexible rates in Milton Friedman’s classic 1953 paper to show that Friedman’s claims are more modest than is often supposed. He then presents some key facts about exchange rates and comparative variability of several variables under fixed and flexible rates. Next, he estimates a model of the so-called real exchange rate under Bretton Woods and flexible rates and tests for the effect of economic aggregates on the exchange rate. The model incorporates some of the principal variables affecting exchange rates suggested by Friedman. 

Commentary on "Real Exchange Rates: Some Evidence from the Postwar Years" by Allan H. Meltzer.

The author first examines empirical evidence on the performance of three monetary regimes: the classical gold standard, Bretton Woods, and the current float. As a backdrop, he examines the mixed regime interwar period. 

Commentary on "The Gold Standard, Bretton Woods, and other Monetary Policy Regimes: A Historical Appraisal" by Michael D. Bordo.