CHAPTER 16

Monetary Policy around the World

One of the most enjoyable parts of my job as Under Secretary was interacting with central bankers and other finance officials in other countries on the formulation and implementation of monetary policy. (One of the many conversations I recall was one with the central bank governor of Argentina about the growth of the monetary aggregates and their IMF program as I was flying in a plane across Europe on my way to Africa). These speeches report on some of this work on monetary policy in other countries. Two other important interactions—with the Bank of Japan and the People’s Bank of China—are discussed in the sections on Japan and China.

Item 1 was given to honor Milton Friedman on his 90^th birthday. It reports on work at the Treasury on the improvements in monetary policy in many countries around the world. The speech tried to answer the question of why these good ideas about monetary policy were spreading, and put the answer in the context of Milton Friedman’s own seminal work. Item 2 was given to honor three other monetary experts who had done much over the years to promote excellence in research at the Fed. Here I reported on some of the organizational changes we made at Treasury International Affairs to improve analysis of financial and monetary issues, building on approaches taken at the Fed.

Items 3 and 4 were given when I was honored in Nigeria and Peru with awards for my own work on monetary policy. The Nigeria speech gave me the chance to relate improvements in monetary policy around the world to monetary reforms in Nigeria. (Item 6 did the same thing for Egypt.)

And the Peru speech reviewed several unusual monetary events that we dealt with at Treasury which required “out of the box” thinking—Afghanistan, Iraq, Argentina. Finally, in item 5, a speech to honor Paul Volcker’s achievements as Fed chair, also made the connection to better monetary policy around the world.

1. A Half Century of Changes in Monetary Policy, University of Chicago, November 8, 2002

2. Models and Monetary Policy: Research in the Tradition of Dale Henderson, Richard Porter, and Peter Tinsley, Federal Reserve Board, April 12, 2004

3. Improvements in Monetary Policy and Implications for Nigeria, Money Market Association of Nigeria, Abuja , Nigeria, May 27, 2004

4. Unusual Episodes in Monetary Policy Making, Banco Central de Reserva del Peru, Lima, Peru, September 6, 2004

Slides with photos to go with Item 4.

5. The International implications of October 1979: Towards a Long Boom on a Global Scale, Reflections on Monetary Policy Conference 25 years After October 1979, Federal Reserve bank of St. Louis, October 7, 2004

6. Monetary Policy in Emerging Market Countries with Implications for Egypt, Remarks at the Egyptian Center for Economic Studies, Cairo, April 5, 2005