White, Lawrence H.Salter, Alexander William2014-09-182014-09-182014-05https://hdl.handle.net/1920/8836The microfoundations revolution in macroeconomic theory has almost entirely displaced the hydraulic Keynesianism of old. Nonetheless, monetary policy in mainstream models is still primarily concerned with the appropriate estimation of changes in output and employment following the manipulation of short-term interest rates. There is little consideration of whether policy makers--or the individual agents whose behavior they are attempting to influence--possess the knowledge or incentives necessary to act in the way prescribed by the models. My dissertation addresses these concerns on three separate margins.146 pagesenCopyright 2014 Alexander William SalterEconomicsFree bankingLender of last resortMonetary institutionsMonetary policyNGDP targetingRobust political economyDissertation