DP2001/02 Money in the Era of Inflation Targeting W A Razzak
... However, I find evidence that the monetary base growth rate and inflation are correlated at a very high frequency. In other words, there is a significant correlation between transitory fluctuations of inflation and the monetary base. Quarterly changes in the CPI and quarterly changes in the monetary ...
... However, I find evidence that the monetary base growth rate and inflation are correlated at a very high frequency. In other words, there is a significant correlation between transitory fluctuations of inflation and the monetary base. Quarterly changes in the CPI and quarterly changes in the monetary ...
as a PDF
... Reserve to influence the whole spectrum of short-term and long-term market rates? This article describes a simple analytical framework that provides a better conceptual understanding of the monetary policy transmission mechanism and also helps explain the complex relationships between monetary polic ...
... Reserve to influence the whole spectrum of short-term and long-term market rates? This article describes a simple analytical framework that provides a better conceptual understanding of the monetary policy transmission mechanism and also helps explain the complex relationships between monetary polic ...
Monetary/Fiscal Interactions: Nominal Indeterminacy
... bounded equilibria. In this case, the price level is pinned down if we specify monetary policy as an interest-rate rule (reacting to in‡ation) that obeys the Taylor Principle or a policy that sets an exogenous path for the money supply ...
... bounded equilibria. In this case, the price level is pinned down if we specify monetary policy as an interest-rate rule (reacting to in‡ation) that obeys the Taylor Principle or a policy that sets an exogenous path for the money supply ...
Chap 27
... get them to imagine themselves in the job of treasurer of a corporation with large liquid resources, and to think how their behavior with respect to those funds might differ according to the short-term interest rates available. Interest Rate Determination The reason that an increase in the money sup ...
... get them to imagine themselves in the job of treasurer of a corporation with large liquid resources, and to think how their behavior with respect to those funds might differ according to the short-term interest rates available. Interest Rate Determination The reason that an increase in the money sup ...
The Fed`s Effect on Excess Returns and Inflation is Bigger Than You
... changes in money supply, and the fall in money holdings represents a decline in real money balances. To restore equilibrium, the real return on bonds must increase. Thus, fewer projects are available at higher real interest rates—investment and industrial production decrease. This mechanism hinges o ...
... changes in money supply, and the fall in money holdings represents a decline in real money balances. To restore equilibrium, the real return on bonds must increase. Thus, fewer projects are available at higher real interest rates—investment and industrial production decrease. This mechanism hinges o ...
Money Cycles - Department of Economics
... generation may produce and therefore money supports trade between the old and young generations. e model of spatially separated markets of Townsend () uses a particular timing structure where each agent alternates between being a buyer and a seller depending on the stock of endowment. Bewley ( ...
... generation may produce and therefore money supports trade between the old and young generations. e model of spatially separated markets of Townsend () uses a particular timing structure where each agent alternates between being a buyer and a seller depending on the stock of endowment. Bewley ( ...
Money-Income Causality-- A Critical Review of the Literature Since
... which he attributed to an independent shift towards the use of currency, because of increased payments for goods relative to assets and for labor relative to capital costs. This supposedly led to a large increase in the currency-deposit ratio which reduced the money supply. The only evidence Kaldor ...
... which he attributed to an independent shift towards the use of currency, because of increased payments for goods relative to assets and for labor relative to capital costs. This supposedly led to a large increase in the currency-deposit ratio which reduced the money supply. The only evidence Kaldor ...
This PDF is a selection from an out-of-print volume from... of Economic Research
... which he attributed to an independent shift towards the use of currency, because of increased payments for goods relative to assets and for labor relative to capital costs. This supposedly led to a large increase in the currency-deposit ratio which reduced the money supply. The only evidence Kaldor ...
... which he attributed to an independent shift towards the use of currency, because of increased payments for goods relative to assets and for labor relative to capital costs. This supposedly led to a large increase in the currency-deposit ratio which reduced the money supply. The only evidence Kaldor ...
Monetary Policy and Funding Spreads
... A one standard deviation spread shock is only about 7 basis points (bottom row of Figure 4, 2nd panel). Following a spread shock, output falls below trend and only returns close to trend after about 20 quarters. Quarterly inflation (per cent per annum) falls by about 1 per cent followed by a small r ...
... A one standard deviation spread shock is only about 7 basis points (bottom row of Figure 4, 2nd panel). Following a spread shock, output falls below trend and only returns close to trend after about 20 quarters. Quarterly inflation (per cent per annum) falls by about 1 per cent followed by a small r ...
Money in the production function: a New Keynesian - Hal-SHS
... of the hypothesis that money enters the production function, and they suggest that real balances could be a missing variable that contributes to the attribution of the unexplained residual to technological changes. Ben-Zion and Ruttan (1975) conclude that money as a factor of demand seems to play an ...
... of the hypothesis that money enters the production function, and they suggest that real balances could be a missing variable that contributes to the attribution of the unexplained residual to technological changes. Ben-Zion and Ruttan (1975) conclude that money as a factor of demand seems to play an ...
Monetary Circuit Theory and the Role of Banks in the
... Since the 1920‘s the Federal Reserve System has focused on a ‗reserve position doctrine‘ that gained its momentum with Friedman‘s Monetarism and Paul Volcker, Chairman of the Board of Governors, implementing it from 1979-82 (Bindseil, 2004a). The experiment of targeting a certain amount of non-borro ...
... Since the 1920‘s the Federal Reserve System has focused on a ‗reserve position doctrine‘ that gained its momentum with Friedman‘s Monetarism and Paul Volcker, Chairman of the Board of Governors, implementing it from 1979-82 (Bindseil, 2004a). The experiment of targeting a certain amount of non-borro ...
Re-imagining Money to Broaden the Future of Development Finance
... money itself. Thanks to electronic payments and widespread cash machines, we experience this credit-money interchangeably from the government-issued cash. Furthermore, banks’ promises to pay us cash are accepted in payment of taxes, practically reducing the distinction. The banks do not need an equi ...
... money itself. Thanks to electronic payments and widespread cash machines, we experience this credit-money interchangeably from the government-issued cash. Furthermore, banks’ promises to pay us cash are accepted in payment of taxes, practically reducing the distinction. The banks do not need an equi ...
Chapter Four Money and Inflation
... When a government cannot raise taxes or sell bonds it must finance spending increases by printing money. In theory, the solution to hyperinflation is simple: stop printing money. In the real world, this requires drastic and painful fiscal restraint. ...
... When a government cannot raise taxes or sell bonds it must finance spending increases by printing money. In theory, the solution to hyperinflation is simple: stop printing money. In the real world, this requires drastic and painful fiscal restraint. ...
Debt-Deflation versus the Liquidity Trap : the Dilemma of - Hal-SHS
... will hold more and more money in their portfolios without any inducement from changing prices in period 0 —which remain fixed even whenever the Central Bank keeps injecting more money.8 The alternative goes as follows: if, in contrast, households (rationally) expect the Central Bank to pump in enoug ...
... will hold more and more money in their portfolios without any inducement from changing prices in period 0 —which remain fixed even whenever the Central Bank keeps injecting more money.8 The alternative goes as follows: if, in contrast, households (rationally) expect the Central Bank to pump in enoug ...
The functions of money and the demand for liquidity
... however, the two alternatives must give the same yield to investors in each of them. The equalisation of yields is brought about by variations of the prices of capitalassets relatively to the prices of money-loans. Thus, the interest rate, determined by the supply of money and the economy’s propensi ...
... however, the two alternatives must give the same yield to investors in each of them. The equalisation of yields is brought about by variations of the prices of capitalassets relatively to the prices of money-loans. Thus, the interest rate, determined by the supply of money and the economy’s propensi ...
Open Market Operations and Money Supply at Zero Nominal
... generalizes the results to the case in which the opportunity cost of holding money versus bonds is zero, which is relevant in practice because the Federal Reserve and other central banks can pay interests on reserves. I focus on open market operations, rather than helicopter drops of money, because ...
... generalizes the results to the case in which the opportunity cost of holding money versus bonds is zero, which is relevant in practice because the Federal Reserve and other central banks can pay interests on reserves. I focus on open market operations, rather than helicopter drops of money, because ...
Intermediate Macroeconomics: Money
... of account. Secondly, commodities may not store well, and hence may not be good stores of value (e.g. crops may not store well in extreme temperatures). Third, commodities are not necessarily easily divisible or transferrable, and hence may be less than ideal as media of exchange (think about trying ...
... of account. Secondly, commodities may not store well, and hence may not be good stores of value (e.g. crops may not store well in extreme temperatures). Third, commodities are not necessarily easily divisible or transferrable, and hence may be less than ideal as media of exchange (think about trying ...
NBER WO~G PAPER SERIES WHAT DOES THE BUNDESBANK TARGET?
... that the Bundesbank is much better described as an inflation targeter than as a money targeter. An additional contribution of the paper is to apply the structural VAR methods of Bemanke and Mihov (1995) to determine the optimal indicator of German monetary policy: We find that the Lombard rate has h ...
... that the Bundesbank is much better described as an inflation targeter than as a money targeter. An additional contribution of the paper is to apply the structural VAR methods of Bemanke and Mihov (1995) to determine the optimal indicator of German monetary policy: We find that the Lombard rate has h ...
Volume 71 No. 1, March 2008 Contents Themed issue: Money and credit
... Over time, the Reserve Bank has shifted its attention away from the very broad system-wide aggregates such as private sector credit (PSC), and towards various credit measures disaggregated by borrowing sector (household, rural, business, etc.) or type of financial institution (bank, nonbank, etc.). ...
... Over time, the Reserve Bank has shifted its attention away from the very broad system-wide aggregates such as private sector credit (PSC), and towards various credit measures disaggregated by borrowing sector (household, rural, business, etc.) or type of financial institution (bank, nonbank, etc.). ...
Can Currency Competition Work? - Penn Economics
... We start our analysis by considering the possibility of a purely private monetary arrangement. In particular, we focus on a system in which entrepreneurs issue intrinsically worthless tokens that circulate as a medium of exchange, attaining a strictly positive value. These privately issued currencie ...
... We start our analysis by considering the possibility of a purely private monetary arrangement. In particular, we focus on a system in which entrepreneurs issue intrinsically worthless tokens that circulate as a medium of exchange, attaining a strictly positive value. These privately issued currencie ...
Debt-Deflation versus the Liquidity Trap: the Dilemma of
... will hold more and more money in their portfolios without any inducement from changing prices in period 0 —which remain fixed even whenever the Central Bank keeps injecting more money.8 The alternative goes as follows: if, in contrast, households (rationally) expect the Central Bank to pump in enoug ...
... will hold more and more money in their portfolios without any inducement from changing prices in period 0 —which remain fixed even whenever the Central Bank keeps injecting more money.8 The alternative goes as follows: if, in contrast, households (rationally) expect the Central Bank to pump in enoug ...
This PDF is a selection from an out-of-print volume from... of Economic Research Volume Title: Monetary Policy Rules
... response to the state of the economy. When analyzing monetary policy using the concept of a policy rule, one must be careful to distinguish between instrument changes due to “shifts” in the policy rule and instrument changes due to “movements along” the policy rule. To make this distinction, I assum ...
... response to the state of the economy. When analyzing monetary policy using the concept of a policy rule, one must be careful to distinguish between instrument changes due to “shifts” in the policy rule and instrument changes due to “movements along” the policy rule. To make this distinction, I assum ...
Principles of Macroeconomics Self-study quiz and Exercises with
... A) will attempt to increase their holdings of money by selling bonds. B) are satisfied with the amount of money they are holding. C) will attempt to increase both their holdings of money and their holdings of bonds. D) will attempt to reduce their holdings of money by buying bonds. Answer: D 11) Ref ...
... A) will attempt to increase their holdings of money by selling bonds. B) are satisfied with the amount of money they are holding. C) will attempt to increase both their holdings of money and their holdings of bonds. D) will attempt to reduce their holdings of money by buying bonds. Answer: D 11) Ref ...
Gold Standards and the Real Bills Doctrine in U.S. Monetary Policy
... monetary standard in the United States.2 To make a metallic standard operational, a legislature must follow certain principles and procedures. First, it must specify the value of the unit of account in terms of a weight of gold (or silver). It does so by prescribing a gold coin of a convenient denom ...
... monetary standard in the United States.2 To make a metallic standard operational, a legislature must follow certain principles and procedures. First, it must specify the value of the unit of account in terms of a weight of gold (or silver). It does so by prescribing a gold coin of a convenient denom ...
International Economics, 10e (Krugman/Obstfeld/Melitz) Chapter 15
... price level rises, individual households and firms will spend more money than before. When real national income (GNP) rises the demand for money will also rise. Page Ref: 383-385 Difficulty: Moderate 7) Explain why one can write the demand for money as the price level times a function of the interes ...
... price level rises, individual households and firms will spend more money than before. When real national income (GNP) rises the demand for money will also rise. Page Ref: 383-385 Difficulty: Moderate 7) Explain why one can write the demand for money as the price level times a function of the interes ...