Formulation of monetary policy.

• Position: Conference held on December 4 to 5, 1998

An NBER-Universities Research Conference on "Formulation of Monetary Policy," organized by Mark Gertler of NBER and New York University and Frederic S. Mishkin of NBER and Columbia University, was held in Cambridge on December 4-5. The program was:

Athanasios Orphanides, Federal Reserve Board, "Monetary Policy Rules based on Real-Time Data"

Discussants: Marvin Goodfriend, Federal Reserve Bank of Richmond, and Kenneth Kuttner, Federal Reserve Bank of New York

Glenn D. Rudebusch, Federal Reserve Bank of San Francisco, "Is the Fed Too Timid? Monetary Policy in an Uncertain World"

Discussants: Kenneth D. West, NBER and University of Wisconsin, and John Williams, Federal Reserve Board

Volker Wieland, Federal Reserve Board, "Monetary Policy and Uncertainty About the Natural Unemployment Rate"

Discussants: John V. Leahy, NBER and Boston University, and James H. Stock, NBER and Harvard University

Soyoung Kim, University of Illinois, "International Transmission of the U.S. Monetary Policy Shocks: Evidence From VARs"

Discussants: Richard H. Clarida, NBER and Columbia University, and Pierre-Olivier Gourinchas, NBER and Princeton University

Peter N. Ireland, Boston College, "Does the Time-Consistency Problem Explain the Behavior of Inflation in the United States?"

Discussants: Laurence M. Ball, NBER and Johns Hopkins University, and Lawrence Christiano, NBER and Northwestern University

Alexander L. Wolman, Federal Reserve Bank of Richmond, "Real Implications of the Zero Bound on Nominal Interest Rates"

Discussants: Jess Benhabib, New York University, and Donald Kohn, Federal Reserve Board

Arturo Estrella, Federal Reserve Bank of New York, and Jeffrey c. Fuhrer, Federal Reserve Bank of Boston, "Dynamic Inconsistencies: Counterfactual Implications of a Class of Rational Expectations Models"

Discussants: Julio J. Rotemberg, NBER and Harvard University, and Christopher A. Sims, NBER and Yale University

Orphanides constructs a database of current-quarter estimates of the quantities of money required by the Taylor rule of monetary policy based only on information available in real time. Then he uses the data to reconstruct the policy recommendations that would have been obtained in real time. He demonstrates that the real-time policy recommendations differ considerably from those obtained with the ex post revised data. Within-year revisions in the policy recommendations are also quite large, with a standard deviation exceeding the quarterly change in the...