Abstract
There is a continuing divide between monetary macrotheory and practical policy analysis. More than half a century ago, (Hawtrey (1932)) coined the expression ‘art of central banking’ to characterize this situation. Modern writers like (Goodhart (1991)), Issing (1993) or Niehans (1978) have reemphasized this view. The situation implies a challenge to econimists who try to build an analytical foundation of central bank policy. The core of such an attempted foundation consists of theoretical and empirical knowledge concerning the transmission process of monetary policy actions, via financial markets, into the real sector of the economy. In particular, a century-old central question pertains to the (Wicksellian) relation between changes in nominal interest rates and real capital investment.
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Gebauer, W., Schmidt, K.J.W., Veestraeten, D. (1999). Financial Market Indicators and Real Capital Investment in Germany. In: Bühler, W., Hax, H., Schmidt, R. (eds) Empirical Research on the German Capital Market. Contributions to Management Science. Physica, Heidelberg. https://doi.org/10.1007/978-3-642-58664-4_6
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DOI: https://doi.org/10.1007/978-3-642-58664-4_6
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