Changing values in monetary policy

Very interesting piece from the Atlanta Fed on their blog, called The Armchair Fed historian. The author, Will Roberds, uses the Ngrams google application to look at the number of references to different monetary policy concepts.

An important question has been the shift in focus between rational expectations which suggests that the impact of monetary policy is limited versus the more activist views of John Taylor. The Ngram will pick-up the numbeer of references through Google books and suggest which has become more important. You could consider this the meme underlying monetary policy. He looks at the reference to the Lucas critique of rational expectations versus the Taylor for controlling monetary policy. The Ngram shows that there was a significant shift from the rational expectations view to the Taylor rule. 

Similarly, Roberds analyzed the Fed's priorities or goals for monetary policy. There has been a clear shift from price stability to financial stability. The Phillips played an important role in the early 1980's but now has fallen in importance. Financial stability is now more important than price stability and unemployment. This is a major shift in behavior; however, it can also be thought of as a return to what was previously important to the Fed.