Monetary policy in an uncertain world Author: Conway, Paul Publisher: Reserve Bank of New Zealand Date: September 2000 Reference: Vol. 63. No. 3. September 2000, pp 5-15 Subjects: Monetary policy Source: Reserve Bank of New Zealand Bulletin Abstract: “It’s not so much the things you don’t know that cause the trouble, as the things you do that ain’t so.” Will Rogers Policymakers and policy economists have long recognised that uncertainty has important implications for monetary policymaking. Milton Friedman’s famous prescription of a constant money growth rule was in large part a response to the existence of pervasive uncertainty. William Brainard is well known for his analysis of (one form of) uncertainty that policymakers face, and the resulting prescription to adjust policy gradually. However, because of its nature, incorporating uncertainty into the policymaking process is by no means straightforward. In this article, we outline the nature and implications of the different types of uncertainty that the Reserve Bank of New Zealand must contend with. File Name: 1997_2001/2000sep63_3Conway.pdf