Current Issues in Monetary Economics

Helmut Wagner University of Hagen, Feithstr. 140, D - 58084 Hagen In the last few years decisive methodological and thematic focal points which are important for practical economic policy have been developed in the theory of monetary and exchange rate policy. This book is concerned with these developments, their assessment and the open questions which have still not been solved. It is divided into four parts. The first part deals with central bank design, the second with strategies of monetary policies and their implementation. Part III is concerned with theoretical aspects of exchange rate policy and monetary union, and part IV with selected issues of monetary and exchange rate policy in developing and transition countries. In the following pages I will provide an 1 overview of the individual articles With the exception of the article by Nobel . Laureate James Tobin, the contributions contained in this book were all introduced and discussed at an academic symposium I organized in Castrop­ Rauxel on 8 and 9 September 1997. James Tobin agreed spontaneously to my suggestion that he should write a comprehensive article especially for this publication. A short summary of the comments or supplementary papers and of the general discussions will be given in the last section of this book, titled "Conclusion and Supplements". There I will also provide some supplements respecting the issues which were the subject of the greatest amount of debate at the symposium.

Monetary Policy: Recent Theory and Practice.- I: Central Bank Design.- 1. Game Theoretic Analysis of Monetary Policy Institutions.- Mechanism Design for Central Banks Results and Unsolved Issues.- Comment.- 2. Outline of Two Controversial Positions on Central Bank Autonomy.- Central Bank Autonomy and Political Decision Process.- For a Monetary Policy that is Independent, yet Subject to Rules.- II: Monetary Policies: Strategies and Implementation.- 3. Theoretical Considerations on Strategies in Monetary Policy.- Monetary Policy Strategies: From Rules to Central Bank Contracts under Contingent Target Agreements.- Comment.- 4. Conceptual Problems of Monetary Policy.- Central Bank Policy Rules: Conceptual Issues and Practical Considerations.- Implementation Problems of Monetary Policy Strategy.- Comment.- III: Theoretical Aspects of Exchange Rate Policy and Monetary Union.- 5. Problems of Flexible and Fixed Exchange Rates.- Controversies on Exchange Rate Systems.- Comment.- 6. Approaching European Monetary Union: On Conversion Rates.- The Indeterminacy of the Euro Conversion Rates. Why It Matters and How It Can Be Solved.- Comment.- IV: Monetary and Exchange Rate Policy in Developing and Transition Countries: Selected Issues.- 7. Some Explanation on Recent Currency Crises.- Issues in Monetary and Exchange Rate Policy of Developing Countries.- 8. Monetary System Design: On Currency Boards.- Towards a General Theory of a Currency Board System.- Comment.- Conclusion and Supplements.- Notes on Contributors.