The link between money, prices, interest rates, and the business cycle is the subject of considerable debate among policymakers and economics. Researchers continue to strive for a coherent, tractable model to help them understand the precise mechanism by which monetary policy affects the macroeconomy. Before setting out to develop such a model, researchers must undertake a thorough study of the available data to identify the key features and regularities that a successful model must incorporate.
Suggested citation: “Monetary Policy,” Federal Reserve Bank of Cleveland, Economic Trends, no. 95-11, pp. 02-05, 11.01.1995.