Since the inflationary 1970s, theoretical work on monetary policy has concentrated almost exclusively on price-level stabilization and the avoidance of nominal shocks. In the aftermath of the collapse of financial bubbles in various parts of the world, the accomplishments and limitations of this dominant approach are debated in this volume edited by Axel Leijonhufvud, with contributions by a number of noted monetary economists, including Nobel Laureate Robert Lucas.

The International Economic Association Acknowledgements Notes on the Contributors List of Abbreviations and Acronyms Introduction; A.Leijonhufvud Monetary Theory and Central Banking; A.Leijonhufvud Comment; J.Mélitz PART I: INTERTEMPORAL EQUILIBRIUM Intertemporal General Equilibrium Theory and Monetary Policy; J.Drèze & H.Polemarchakis Comment; J.M.Grandmont Comment; J.Urrutia The Fiscalist Approach to Monetary Theory; R.Marimon Comment; S.Honkapohja Inflation and Welfare; R.Lucas Comment; D.Laidler Comment; H.W.Sinn PART II: MONETARY AND FINANCIAL INSTABILITY Business Cycles in a Financially Deregulated America; A.Wojnilower Comment; L.Jonung Learning About Trends: Spending and Credit Fluctuations in Open Economies; D.Heymann, M.Kaufman & P.Sanguinetti Comment; P.L.Sacco Comment; J.L.Gaffard Monetary Policy and the Macroeconomics of 'Soft' Growth; J.P.Fitoussi Comment; E.Streissler Index of Names Subject Index