Mr. Bernanke is a highly respected monetary economist and a former governor at the Federal Reserve.

Bennett T. McCallum (born July 27, 1935) is an American monetary economist.

The Federal Reserve chose in 1978 to raise interest rates fairly gradually, a decision that has been heavily criticized as inadequate since then by monetary economists.

Mainstream economic theorists criticize gold-standard-oriented monetary economists and vice-versa.

This proposition "is universally accepted today by monetary economists," Mr. Bernanke said.

In addition, monetary economists today often refer to a "Cagan demand function" when modeling the real value of money.

"I am still a little bit concerned," that rates could go higher, said Steven Slifer, an executive vice president and monetary economist at Lehman Brothers.

For three years before that, he was a governor at the Federal Reserve, where he was viewed as a superb monetary economist who won over financial markets.

Required reserves are therefore considered by some central bankers, monetary economists and textbooks to only play a very small role in limiting money creation in these countries.

The existence of money illusion is disputed by monetary economists who contend that people act rationally (i.e. think in real prices) with regard to their wealth.