“I refuse to start from the assumption that the role of monetary policy is to control and stabilize inflation. The only acceptable way to start is, I believe, to think of the goal of monetary policy, together with fiscal policy,as the maximization of welfare.”

— Olivier Blanchard

" Monetary Policy; Science or Art? https://economics.mit.edu/files/742" (2006)

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Olivier Blanchard 4

French economist 1948

Lawrence Klein (1920–2013) American economist

"Keynsianism Again: Interview with Lawrence Klein", Challenge (May-June 2001)

“Balancing fiscal and monetary policies is a problem. If you do just one thing, it is not necessarily enough—neither monetary policy alone nor fiscal policy alone, and neither tax cuts nor expenditure increases alone. You need to mix policy. By having the right balance, you can get high employment and stable prices.”

Lawrence Klein (1920–2013) American economist

"Keynsianism Again: Interview with Lawrence Klein", Challenge (May-June 2001)

“There is no doubt, and in this I agree with Milton Friedman, that once the Crash had occurred, the Federal Reserve System pursued a silly deflationary policy. I am not only against inflation but I am also against deflation! So, once again, a badly programmed monetary policy prolonged the depression! So, once again, a badly programmed monetary policy prolonged the depression. One consequence of this policy was, of course, the fact that confidence was destroyed.”

Friedrich Hayek (1899–1992) Austrian and British economist and Nobel Prize for Economics laureate

1960s–1970s, A Conversation with Professor Friedrich A. Hayek (1979)

“Keynes's idea was very simple. Monetary and fiscal policy should have a single goal, jointly pursued, of maintaining a full employment level aggregate demand.”

Robert Skidelsky (1939) Economist and author

Source: John Maynard Keynes: The Return of the Master (2009), Ch. 8 : Keynes for Today

“Economic and monetary union…is incompatible with independent sovereign states with control over their own fiscal and monetary policies. It would be impossible…to have irrevocably fixed exchange rates while individual countries retained independent monetary policies…such a system could never have the credibility necessary to persuade the market that there was no risk of realignment. Thus EMU inevitably implies a single European currency, with monetary decisions…taken not by national Governments and/or central banks, but by a European Central Bank. Nor would individual countries be able to retain responsibility for fiscal policy. With a single European monetary policy there would need to be central control over the size of budget deficits and, particularly, over their financing. New European institutions would be required, to determine overall Community fiscal policy and agree the distribution of deficits between individual Member States…It is clear that Economic and Monetary Union implies nothing less than European Government…and political union: the United States of Europe. That is simply not on the agenda now, nor will it be for the forseeable future.”

Nigel Lawson (1932) British Conservative politician and journalist

Speech to the Royal Institute for International Affairs, Chatham House (25 January 1989), quoted in The View from No. 11: Memoirs of a Tory Radical (London: Bantam, 1992), p. 910.

“Today, of course, our current inflation problem is firmly rooted in the irresponsible monetary policies of maestro Greenspan.”

Peter D. Schiff (1963) American entrepreneur, economist and author

Quotes from Crash Proof (2006)

“There is no reason to think that the impact [of monetary policy] will be captured in any single [variable]…, whether it is a monetary stock or a market interest rate.”

James Tobin (1918–2002) American economist

Source: "A general equilibrium approach to monetary theory" (1969), p. 29 as cited in: Andrés, Javier, J. David López-Salido, and Edward Nelson. " Tobin's imperfect asset substitution in optimizing general equilibrium http://research.stlouisfed.org/wp/2004/2004-003.pdf." Journal of Money, Credit and Banking (2004): 665-690.

“[New classical economics] was the starting point for a rightward shift in economics that went against the idea that monetary policy can improve macroeconomic outcomes.”

Janet Yellen (1946) American economist and professor

The Hand on the Lever (2014)

“I believe that monetary policy has a chronic defect. It is asymmetric—it works better in restraining an economy than in stimulating an economy.”

Lawrence Klein (1920–2013) American economist

"Keynsianism Again: Interview with Lawrence Klein", Challenge (May-June 2001)

“At best, in such depression times, monetary policy is a feeble reed on which to lean.”

John Kenneth Galbraith book The Great Crash, 1929

Source: The Great Crash, 1929 (1954 and 1997 https://openlibrary.org/books/OL25728842M/The_Great_Crash_1929), Chapter X, Cause and Consequence, p. 190

“I refuse to start from the assumption that the role of monetary policy is to control and stabilize inflation. The only acceptable way to start is, I believe, to think of the goal of monetary policy, together with fiscal policy,as the maximization of welfare.”

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