In the debate on monetary policy strategies on the two sides of the Atlantic, it is now almost commonplace to contrast the Fed and the European Central Bank (ECB) by pointing out the flexibility and capacity to adjust of the former and the rigidity and extreme caution of the latter, and its...

For Lang and Setterfield (2006-7), economists should reject the traditional equilibrium approach for its unrealism. Their criticism of the mainstream equilibrium approach is correct, but they fail to stress that realism of the analysis, however, requires being concerned with equilibrium, seen as...