*The views expressed here are those of the author and do not necessarily represent the views of the Federal Reserve Bank of Philadelphia or the Federal Reserve System. hether policymakers should commit to a certain course of action or have the flexibility to approach each situation as it arises continues to be a central question in the design of monetary policy. A seminal article written by two...

This paper examines how recent econometric policy evaluation research on monetary policy rules can be applied in a practical policymaking environment. According to this research, good policy rules typically call for changes in the federal funds rate in response to changes in the price level or changes in real income. An objective of the paper is to preserve the concept of such a policy rule in ...

We argue that there are conditions such that any inflation targeting regime is preferable to full policy discretion, even if long-run inflation rates are identical across regimes. The key observation is that strict inflation targeting outperforms the discretionary policy response to sufficiently persistent shocks. Under full policy discretion, inflation expectations over the medium term respond...

C ostas Azariadis and Vincenzo Galasso address a basic but very important question about the social security system. What are the incentives for young workers to contribute funds and thus maintain such a system? The issue is to understand the economic and political forces that combine to provide the foundations for a social security system. The starting point of the analysis is perhaps one of t...

Rarely has a piece of social science research received more attention than the 1999 study by Kevin Schulman and others reporting large differences in physicians’ responses to identical heart disease symptoms presented by black and white actors portraying patients. The 720 physician-subjects who participated in the study referred lower proportions of African-American than white age and sex match...