Laidler suggests that monetarism failed when its proponents got too prescriptive by advocating rigid rules for money growth. Among the lessons he takes from the failed monetarist experiment are that central banking is an applied science and that our imperfect understanding of how economies and markets function implies that a good dose of humility is required – and I agree. As evidence of that humility on my part, let me also agree with Laidler that two important questions about the conduct of monetary policy have not yet been resolved. This is unfortunate because
these two questions are both long-standing sources of debate and central to current policy concerns. First, what is the best way to pursue price stability, and, second, how should asset prices be taken into account in steering policy?