jackson hole ( kansas city : federal reserve bank of kansas city ), pp. 185 - 288. 15. see gauti b. eggertsson and michael woodford ( 2003 ), “ the zero bound on interest rates and optimal monetary policy, ” brookings papers on economic activity, no. 1, pp. 139 - 211. 16. i am grateful to hess chung of the federal reserve board for drawing to my attention the general point made in this paragraph. 17. see robert j. barro ( 1974 ), “ are government bonds net wealth? ” journal of political economy, vol. 82 ( november - december ), pp. 1095 - 1117. 18. see joseph e. gagnon ( 2016 ), “ quantitative easing : an underappreciated success, ” policy brief 16 - 4 ( washington : peterson institute for international economics, april ). 19. i draw here on notes provided by michael kiley of the federal reserve board. 20. in woodford ’ s and wicksell ’ s analyses, natural values are those that would prevail in the absence of nominal rigidities. 21. see, for example, katharine neiss and edward nelson ( 2002 ), “ inflation dynamics, marginal cost, and the output gap : evidence from three countries, ” unpublished paper, bank of england, july ; rochelle edge, michael kiley, and jean - philippe laforte ( 2008 ), “ natural rate measures in an estimated dsge model of the u. s. economy, ” journal of economic dynamics and control, vol. 32, pp. 2512 - 35. 22. see, for example, figure 1 in janet yellen ( 2015 ), “ the economic outlook and monetary policy, ” speech delivered at the economic club of washington, washington, d. c., december 2. 23. see thomas laubach and john williams ( 2003 ), “ measuring the natural rate of interest, ” review of economics and statistics, vol. 85, pp. 305 - 25. bis central bankers ’ speeches

stanley fischer : ( money ), interest and prices – patinkin and woodford speech by mr stanley fischer, vice chair of the board of governors of the federal reserve system, at “ a conference in honor of michael woodford ’ s contributions to economics ”, cosponsored by the federal reserve bank of new york, columbia university program for economic research, and columbia university department of economics, new york city, 19 may 2016. * * * the footnotes can be found at the end of the speech. i am grateful to hess chung, rochelle edge, william english, michael kiley, thomas laubach, matthias paustian, david reifschneider, jeremy rudd, and stacey tevlin of the federal reserve board for their advice and assistance it is an honor for me to speak at the opening of this conference in honor of michael woodford, whose contributions to the theory of economic policy are frequently a central part of the economic analysis that takes place in the policy discussions at the federal reserve. the main story i want to tell today is about the quality of michael ’ s major book, interest and prices ( henceforth mwip ). i will start with his predecessors, beginning as michael does in his interest and prices with wicksell. 1, 2 i shall quote key points from and about wicksell ’ s interest and prices ( henceforth kwip ), and following that, from patinkin ’ s money, interest, and prices ( second edition, 1965 ) ( henceforth mip ), which are relevant to mwip, michael woodford ’ s interest and prices ( 2003 ). wicksell ’ s interest and prices 1. inflation. the subtitle of wicksell ’ s interest and prices ( kwip ) is a study of the causes regulating the value of money and its opening paragraph emphasizes the problem of inflation : changes in the general level of prices have always excited great interest. obscure in origin, they exert a profound and far - reaching influence on the whole economic and social life of a country. wicksell follows this opening by discussing the difference between the ability of the economic system to adjust to changes in relative prices and to changes in the general level of prices. in the latter case, adjustment can no longer proceed through changes in demand or through a movement of factors of production from one branch of production to another. its progress is much slower, being accomplished under continual difficulties, and it is never complete ; so