Monetary Policy and the Wisdom of Wayne Gretzky

I’m always trying to find good ways to teach beginning economics students about monetary policy. For years I compared it to flying a fighter jet where you have to anticipate the actions of the other pilots, and if you get it wrong you crash and burn in a great depression or a great inflation. I liked to show the scene from the movie Top Gun where, in a classroom scene after a flight, instructor Kelly McGillis (Charlie) chastises fighter pilot Tom Cruise (Maverick) for a near crash and burn because of his risky behavior. I stopped showing that scene because the next scene is quite a bit more intimate, not really appropriate for an introductory economics class, and if you do not stop the DVD just in time the students get completely distracted from the subject of monetary policy. Once while I was lecturing at West Point the DVD didn't stop and the movie rolled on past the classroom scene to the next scene to a roar of laughter from hundreds of Army cadets in the lecture hall watching the big screen behind me.

So I was pleased that Philadelphia Fed President Charles Plosser, in a speech last Tuesday in Rochester, came up with an even better analogy: hockey. He tells the story of how “Hockey great Wayne Gretzky was once asked about his success on the ice. He responded by saying, ‘I skate to where the puck is going to be, not to where it has been.’ He didn’t chase the puck. Instead, Gretzky wanted his hockey stick to be where the puck would be going next. He scored many goals with that strategy, and I believe monetary policymakers can better achieve their goals, too, if they follow the Gretzky strategy.”