Edward M. Gramlich

1969: The Role of Money in Economic Activity: Complicated or Simple?

A hot dispute currently rages as to the importance of money in influencing economic activity. But we would be wrong to think this a new controversy. Indeed, it is a very old controversy which has been with us for decades. Money was all-important in classical models of the economy but much less so in Keynesian models which gained predominance in the Great Depression and continued into the postwar period. Lately, however, there has been a strong revival of interest in monetary phenomena and this revival has led to the current heated dispute on the importance of money.

Productivity and the New Economy

I am honored to be here tonight and would like to compliment the Atlanta Fed for a very topical, important conference. We have lost focus on productivity in the last year, but of all the economics variables that one can imagine, I think productivity is the single most important. It is the one that determines how living standards evolve in the long run, impacts the financial health of the various trust funds that we use to fund entitlement spending, affects the budget status, currency valuations, stock market valuations, and many other things. If you were the leader of a country and had to pick one statistic that you would like to be favorable, I think it would be productivity.