Since the Bank of England was made independent in 1997, the conduct
of monetary policy has been relatively uncontroversial. The debates
between Keyneisans, monetarists and supporters of fixed exchange
rate mechanisms now appear very distant.
Despite the apparent consensus there are many issues related to
the conduct of monetary policy that are not yet settled and which
will soon come to the fore. Is the current form of independence for
the Bank of England appropriate? Should a central bank target
inflation or the prices level? How does a central bank deal with
asset price deflation? Should more account be taken of monetary
aggregates? Should central banks target asset prices? What is the
relationship between the money supply and asset price inflation?
How should central banks ensure financial stability?


The IEA was at the forefront of changing the parameters of the
debate surrounding monetary policy in the 1970s and 1980s. This
text, brings together some of the leading authors in the field,
including the current Governor of the Bank of England, to discuss
current issues in monetary policy and the relationship between
monetary policy and financial markets. It is appropriate for
undergraduates and postgraduates in economics and finance as well
as for practitioners in financial markets.