What does Jerome Powell know that William McChesney Martin did not—And what role did academic research play in that?

Much has changed over the past 50 years, both in central banking circles and in academic monetary economics. This paper inquires about the interaction between the two: how much and in what ways has academic research influenced the practice of monetary policy, especially by the Federal Reserve? More specifically, the paper takes up five issues: (a) the inflation target, (b) the monetary policy instrument (e.g., interest rate, money supply or “unconventional” instrument?), (c) the model of monetary policy transmission, (d) central bank communications and (e) rules versus discretion.