Optimal Monetary Policy in a Currency Area
... distortion that induces an inefficient level of output; ii) inflation in each region that creates an inefficient dispersion of prices and iii) price stickiness that may create a non-efficient path of the terms of trade in response to asymmetric disturbances. By using a deadweight loss evaluation, as in mo ...
... distortion that induces an inefficient level of output; ii) inflation in each region that creates an inefficient dispersion of prices and iii) price stickiness that may create a non-efficient path of the terms of trade in response to asymmetric disturbances. By using a deadweight loss evaluation, as in mo ...
NBER WORKING PAPER SERIES BACKWARD-LOOKING INTEREST-RATE RULES, INTEREST-RATE SMOOTHING, AND MACROECONOMIC INSTABILITY
... which includes any arbitrarily small neighborhood around the steady state, can be supported as an equilibrium outcome. We demonstrate by means of simulations of calibrated economies that the resulting oscillations are economically significant. Besides feedback rules that respond to past measures of ...
... which includes any arbitrarily small neighborhood around the steady state, can be supported as an equilibrium outcome. We demonstrate by means of simulations of calibrated economies that the resulting oscillations are economically significant. Besides feedback rules that respond to past measures of ...
Monetary Institutions, Partisanship, and Inflation Targeting Bumba
... pioneer in 1989 when Parliament passed the Reserve Bank of New Zealand Act, thereby establishing a quantitative target for inflation (see Bernanke et al. 1999; Nicholl and Archer 1992). A number of countries soon followed suit, including Canada (1991), Australia (1993), Finland (1993), and Mexico ( ...
... pioneer in 1989 when Parliament passed the Reserve Bank of New Zealand Act, thereby establishing a quantitative target for inflation (see Bernanke et al. 1999; Nicholl and Archer 1992). A number of countries soon followed suit, including Canada (1991), Australia (1993), Finland (1993), and Mexico ( ...
A Separate Debt Management Office
... generally would not succumb to the political pressure to trade-off long term debt management goals with short-run budget goals (Alesina, Prati and Tabellini, 1990). A separation of these policies was expected to avoid such conflicts and improve policy credibility. In case the central bank conducts d ...
... generally would not succumb to the political pressure to trade-off long term debt management goals with short-run budget goals (Alesina, Prati and Tabellini, 1990). A separation of these policies was expected to avoid such conflicts and improve policy credibility. In case the central bank conducts d ...
The Term Structure of Interest Rates, Real Activity and Inflation
... immediately (to I,) due to the liquidity effect. Rational investors realise that in the medium/long run output will rise, increasing the demand for money. The short term interest rate must thus be expected to rise over time. As a consequence the long interest rate does not fall by as much as the sh ...
... immediately (to I,) due to the liquidity effect. Rational investors realise that in the medium/long run output will rise, increasing the demand for money. The short term interest rate must thus be expected to rise over time. As a consequence the long interest rate does not fall by as much as the sh ...
Working Paper No. 510 Institutional investor
... Committee (MPC) reduced policy rates to their effective lower bound of 0.5% and began a programme of large-scale purchases of financial assets financed through the creation of central bank reserves, so-called quantitative easing (QE). While the objectives of the QE policy were clear, there has been ...
... Committee (MPC) reduced policy rates to their effective lower bound of 0.5% and began a programme of large-scale purchases of financial assets financed through the creation of central bank reserves, so-called quantitative easing (QE). While the objectives of the QE policy were clear, there has been ...
What Does Monetary Policy Do?
... exactly when there are no disturbancesto policy. They are, in other words, policy rules or reaction functions. The remainingequations of the system describe the nonpolicy part of the economy, and their disturbancesare nonpolicy sources of variationin the economy. While representationsof the behavior ...
... exactly when there are no disturbancesto policy. They are, in other words, policy rules or reaction functions. The remainingequations of the system describe the nonpolicy part of the economy, and their disturbancesare nonpolicy sources of variationin the economy. While representationsof the behavior ...
A New Approach to Monetary Theory and Policy: A Monetary
... monetary theory, which relies on the supply of money alone, since the value and demand of money are omitted. As distinct from the Islamic theory of value as relayed by Ibn Khaldun5 (1377), or even the classical theory of value and monetary theory, the quantity theory of money regards the value of mo ...
... monetary theory, which relies on the supply of money alone, since the value and demand of money are omitted. As distinct from the Islamic theory of value as relayed by Ibn Khaldun5 (1377), or even the classical theory of value and monetary theory, the quantity theory of money regards the value of mo ...
No:10 Research Department Working Paper
... over monetary aggregates. Priority was given to financial stability rather than controlling inflation in the face of increasing currency substitution as seen from a rise in the share of foreign currency denominated bank deposits in total deposits from 24% in 1989 to 46% in 1999. Monetary policy has ...
... over monetary aggregates. Priority was given to financial stability rather than controlling inflation in the face of increasing currency substitution as seen from a rise in the share of foreign currency denominated bank deposits in total deposits from 24% in 1989 to 46% in 1999. Monetary policy has ...
Stand alone income statement
... As of December 31, 2009, the Bank owned 100% of Commercial bank “Potential”. LLC Commercial Bank Potential was formed on November 29, 1990, as a limited liability company under the laws of the Russian Federation. The Bank operates under a general banking license issued by the Central Bank of Russia ...
... As of December 31, 2009, the Bank owned 100% of Commercial bank “Potential”. LLC Commercial Bank Potential was formed on November 29, 1990, as a limited liability company under the laws of the Russian Federation. The Bank operates under a general banking license issued by the Central Bank of Russia ...
Bulletin Contents Volume 75 No. 1, March 2012
... This article reviews how the Reserve Bank’s prudential supervision activities have evolved over the last five years. During this period, three major impacts on prudential supervision have been the global financial crisis (GFC), the collapse of nearly 50 finance companies and the Canterbury earthquak ...
... This article reviews how the Reserve Bank’s prudential supervision activities have evolved over the last five years. During this period, three major impacts on prudential supervision have been the global financial crisis (GFC), the collapse of nearly 50 finance companies and the Canterbury earthquak ...
fgfdgfd
... (Evans, 1985, 1987b; Fackler and McMillin, 1989) have supported the proposition. Fiscal deficits can also have impact on other macroeconomic variables such as inflation and money supply. If an increase in aggregate demand is a result of fiscal deficit, the price levels are likely to rise and consequ ...
... (Evans, 1985, 1987b; Fackler and McMillin, 1989) have supported the proposition. Fiscal deficits can also have impact on other macroeconomic variables such as inflation and money supply. If an increase in aggregate demand is a result of fiscal deficit, the price levels are likely to rise and consequ ...
Interest Rate Policy and the Inflation Scare Problem
... been accomplished by changing the level of short rates to set in motion forces slowing the growth of money demand in order to allow a future reduction in money growth and inflation. To view the Federal Reserve’s policy instrument as the federal funds rate is thus to set money to the side, since at a ...
... been accomplished by changing the level of short rates to set in motion forces slowing the growth of money demand in order to allow a future reduction in money growth and inflation. To view the Federal Reserve’s policy instrument as the federal funds rate is thus to set money to the side, since at a ...
Instruments of the Money Market - Richmond Fed
... commercial paper. After the failure of the Penn Central Transportation Company in June 1970, however, some borrowers found it difficult to issue commercial paper. The Federal Reserve eliminated interest rate ceilings on large CDs with maturities of less than three months so that banks could return t ...
... commercial paper. After the failure of the Penn Central Transportation Company in June 1970, however, some borrowers found it difficult to issue commercial paper. The Federal Reserve eliminated interest rate ceilings on large CDs with maturities of less than three months so that banks could return t ...
Critique of accommodating central bank policies and the
... Arbitrage condition between nominal and real interest rates This section reviews why in the long term (see below), nominal interest rates are closely linked to the sum of the real rate of return on capital and the inflation rate. This implies that a central bank does not have a degree of freedom in ...
... Arbitrage condition between nominal and real interest rates This section reviews why in the long term (see below), nominal interest rates are closely linked to the sum of the real rate of return on capital and the inflation rate. This implies that a central bank does not have a degree of freedom in ...
Articles The Triumph of Monetarism?
... business cycle and the concomitant general price level movements powerfully affected incentives: economic actors had strong incentives to economize on money holdings during times of boom and inflation, and to hoard money balances during times of recession and deflation. These swings in velocity ampl ...
... business cycle and the concomitant general price level movements powerfully affected incentives: economic actors had strong incentives to economize on money holdings during times of boom and inflation, and to hoard money balances during times of recession and deflation. These swings in velocity ampl ...
Global Views 02-07-14
... Council of the Bank of England rolled out last August. He is expected to do so again on Wednesday in the form of the BoE's quarterly inflation report. Markets have tested the Governor in his first eight months on the job in no small part because the initial promise to keep rates on hold until late 2 ...
... Council of the Bank of England rolled out last August. He is expected to do so again on Wednesday in the form of the BoE's quarterly inflation report. Markets have tested the Governor in his first eight months on the job in no small part because the initial promise to keep rates on hold until late 2 ...
Macro-economics of balance-sheet problems and the
... that they cannot stabilise the business cycle and prevent deflationary pressures on prices by doing so. In addition, in many countries, homeowners, firms and banks have gotten into trouble due to bursts of real-estate bubbles, particularly in Ireland and Spain, but also in the Netherlands. This has ...
... that they cannot stabilise the business cycle and prevent deflationary pressures on prices by doing so. In addition, in many countries, homeowners, firms and banks have gotten into trouble due to bursts of real-estate bubbles, particularly in Ireland and Spain, but also in the Netherlands. This has ...
Simple and Robust Rules for Monetary Policy by
... models in robustness analyses of Levin, Wieland, and Williams (1999). More or less simultaneously practical experience was confirming the model simulation results as the instability of the Great Inflation of the 1970s gave way to the Great Moderation around the same time that actual monetary policy ...
... models in robustness analyses of Levin, Wieland, and Williams (1999). More or less simultaneously practical experience was confirming the model simulation results as the instability of the Great Inflation of the 1970s gave way to the Great Moderation around the same time that actual monetary policy ...
Chapter 19 Output and Inflation in the Short Run: Aggregate Supply
... seem to suggest that economic activity can only deviate from its long run trend for extended periods of time if expectations are ’sticky’ in the sense that economic agents keep on overestimating or underestimating the rate of inflation for quite a while. In practice the deviations of output from tre ...
... seem to suggest that economic activity can only deviate from its long run trend for extended periods of time if expectations are ’sticky’ in the sense that economic agents keep on overestimating or underestimating the rate of inflation for quite a while. In practice the deviations of output from tre ...
Exempt Private Activity Bonds (PABs) from the Alternative Minimum
... state and local governments shouldering most of this cost. Since the 2008 financial crisis, though, this has been particularly difficult for states and localities to afford. Over the past decade, the federal government has contributed to only about 25 percent of total public spending on transportati ...
... state and local governments shouldering most of this cost. Since the 2008 financial crisis, though, this has been particularly difficult for states and localities to afford. Over the past decade, the federal government has contributed to only about 25 percent of total public spending on transportati ...
Money and Information in a New Neoclassical Synthesis Framework
... Conventional wisdom renders money redundant in the current consensus business cycle models used for policy analysis. The New Keynesian (or New Neoclassical Synthesis –NNS) model with sticky prices has become the standard workhorse for monetary policy analysis in the last fifteen years or so (see Rot ...
... Conventional wisdom renders money redundant in the current consensus business cycle models used for policy analysis. The New Keynesian (or New Neoclassical Synthesis –NNS) model with sticky prices has become the standard workhorse for monetary policy analysis in the last fifteen years or so (see Rot ...
Velocity: Money`s Second Dimension
... is held for purposes other than as a medium of exchange. The speculative motive for holding money is not directly related to expenditures, according to Keynes, but depends instead on the "liquidity preference" of asset holders. The amount of money held in speculative balances, Keynes hypothesized, d ...
... is held for purposes other than as a medium of exchange. The speculative motive for holding money is not directly related to expenditures, according to Keynes, but depends instead on the "liquidity preference" of asset holders. The amount of money held in speculative balances, Keynes hypothesized, d ...
Domestic Government Debt Structure, Risk Characteristics
... Nigeria has not had a stable macroeconomic background since the late 1990’s up to the early 2000. The GDP growth has been fluctuating widely, peaking at an all time high of 10.2% in 2003. The inflation rate, which had reached an all time high of 29.3% in 1996, dropped in the early part of 2000 but h ...
... Nigeria has not had a stable macroeconomic background since the late 1990’s up to the early 2000. The GDP growth has been fluctuating widely, peaking at an all time high of 10.2% in 2003. The inflation rate, which had reached an all time high of 29.3% in 1996, dropped in the early part of 2000 but h ...
Transmission of Monetary Policy with Heterogeneity in Household
... savings adjust to undo any temporary mismatch between income and consumption. In an economy with incomplete markets, by contrast, borrowing constraints and precautionary motives are important. They make savings and, thus, consumption less sensitive to interest rate changes. This renders the direct e ...
... savings adjust to undo any temporary mismatch between income and consumption. In an economy with incomplete markets, by contrast, borrowing constraints and precautionary motives are important. They make savings and, thus, consumption less sensitive to interest rate changes. This renders the direct e ...