Overall, the evidence on monetary policy may be summarised as follows: With the great moderation – or to put it in the terminology of the optimum currency area theory, in the absence of country-specific shocks – the need for a monetary policy stance that is substantially different from the one in advanced economies has declined significantly in recent years.
In the 1970s, in independent research, they developed systematic approaches to distinguishing between cause and effect in macroeconomic data. Now, almost 40 years later, their thinking informs the making of macroeconomic policy around the world. I am especially pleased to acknowledge Chris and Tom’s achievement because of their connection to the state of Minnesota.