2010-15 - University of Glasgow
... Although not reported, and coherently with the estimations above, the joint estimation of an equation including all dummy variables, both D(+) and D(-), returns significant coefficients only for dummies D(+) denoting an increase of the monetary aggregate. ...
... Although not reported, and coherently with the estimations above, the joint estimation of an equation including all dummy variables, both D(+) and D(-), returns significant coefficients only for dummies D(+) denoting an increase of the monetary aggregate. ...
Should the Federal Reserve Pay Competitive Interest on Reserves?
... either deposits or bonds to households. Banks need reserves to manage the liquidity of their deposits. If the Fed pays less than a competitive rate on reserves, the bank incurs extra costs when funding itself by issuing deposits; so, the tax on reserves is implicitly a tax on deposits. One goal of p ...
... either deposits or bonds to households. Banks need reserves to manage the liquidity of their deposits. If the Fed pays less than a competitive rate on reserves, the bank incurs extra costs when funding itself by issuing deposits; so, the tax on reserves is implicitly a tax on deposits. One goal of p ...
Money, Inflation, and Output Under Fiat and Commodity Standards
... To measure the quantity of secondary money, we add all the assets held by the nonbank public that are used as media of exchange and subtract the quantity of primary money. We take the assets that circulate as media of exchange to include those types included in the conventionally used monetary aggre ...
... To measure the quantity of secondary money, we add all the assets held by the nonbank public that are used as media of exchange and subtract the quantity of primary money. We take the assets that circulate as media of exchange to include those types included in the conventionally used monetary aggre ...
Requirements for Using Interest Rates as an Operating Target for
... around the rate of nominal GDP growth, in effect targeting growth in broad money. Capital controls were utilized to ensure that domestic savings would be used to finance domestic investment (rather than the acquisition of foreign assets), and to limit reliance on short-term external financing. Good ...
... around the rate of nominal GDP growth, in effect targeting growth in broad money. Capital controls were utilized to ensure that domestic savings would be used to finance domestic investment (rather than the acquisition of foreign assets), and to limit reliance on short-term external financing. Good ...
Monetary Policy with Abundant Liquidity
... of Treasury securities and agency MBS to run off as they are redeemed.3 The FOMC has not ruled out selling assets during the normalization of monetary policy, but it appears that most FOMC members do not anticipate doing so.4 Figure 1 shows projections of the Fed’s total assets and bank reserves thr ...
... of Treasury securities and agency MBS to run off as they are redeemed.3 The FOMC has not ruled out selling assets during the normalization of monetary policy, but it appears that most FOMC members do not anticipate doing so.4 Figure 1 shows projections of the Fed’s total assets and bank reserves thr ...
Quarterly Reviewvol. 22, no. 3
... quire money. Money does not represent a new way for so- Note that the gift-giving game differs from the moneciety to accumulate wealth. Money does not reduce the tary economy in only two respects. One is that in the giftcosts of transferring resources from one person to another. giving game, money d ...
... quire money. Money does not represent a new way for so- Note that the gift-giving game differs from the moneciety to accumulate wealth. Money does not reduce the tary economy in only two respects. One is that in the giftcosts of transferring resources from one person to another. giving game, money d ...
- Alfred Lerner College of Business and Economics
... valid, simulations suggest that a tax rebate twice as large repeated for four quarters would have significantly mitigated the 2001 recession. According to a presentation by Parker (2003), preliminary results from his recent study with Souleles of the 2001 rebate finds a substantial short-run impact ...
... valid, simulations suggest that a tax rebate twice as large repeated for four quarters would have significantly mitigated the 2001 recession. According to a presentation by Parker (2003), preliminary results from his recent study with Souleles of the 2001 rebate finds a substantial short-run impact ...
Central bank independence and the monetary instrument problem
... restriction on strategies the model would have ‘embarrassingly many equilibria’ (cf. Albanesi, Chari, and Christiano, 2003, p. 715) and its optimal policy prescriptions would be impossible to assess. Therefore, and following the common approach in the literature, we restrict attention to Markov stra ...
... restriction on strategies the model would have ‘embarrassingly many equilibria’ (cf. Albanesi, Chari, and Christiano, 2003, p. 715) and its optimal policy prescriptions would be impossible to assess. Therefore, and following the common approach in the literature, we restrict attention to Markov stra ...
Monetary Magic? How the Fed Improved the Flexibility of the
... persistence in a model relying only on staggered contracts or menu costs to explain nominal inertia. Lower and more stable inflation would seem to be a force for lengthening contracts, implying greater persistence in inflation. Similarly, costs of adjustment would be lower as inflation is reduced an ...
... persistence in a model relying only on staggered contracts or menu costs to explain nominal inertia. Lower and more stable inflation would seem to be a force for lengthening contracts, implying greater persistence in inflation. Similarly, costs of adjustment would be lower as inflation is reduced an ...
effects of expansionary monetary policy
... shock, we turn on that particular shock making it one for the first time period and making all the other shocks zero for all time periods. This process can be well understood by looking at the following equations: ...
... shock, we turn on that particular shock making it one for the first time period and making all the other shocks zero for all time periods. This process can be well understood by looking at the following equations: ...
and Quantity Theory of Money
... A Brief Look at the Adjustment Process The immediate effect of an increase in the money supply is to create an excess supply of money. (Once again, please be reminded that increase in money supply does not mean that it automatically increases the money holding by the people. It must go through the p ...
... A Brief Look at the Adjustment Process The immediate effect of an increase in the money supply is to create an excess supply of money. (Once again, please be reminded that increase in money supply does not mean that it automatically increases the money holding by the people. It must go through the p ...
Working Paper No. 355 Can Monetary Policy Affect The Real
... side of the economy without influence from the demand side). The Phillips curve is then vertical, with no long-run trade-off between inflation and unemployment or between inflation and output. The long run determination of unemployment and output is thought to depend on the supply side of the econom ...
... side of the economy without influence from the demand side). The Phillips curve is then vertical, with no long-run trade-off between inflation and unemployment or between inflation and output. The long run determination of unemployment and output is thought to depend on the supply side of the econom ...
Money creation in the modern economy
... ‘multiplied up’ into more loans and deposits. Although commercial banks create money through lending, they cannot do so freely without limit. Banks are limited in how much they can lend if they are to remain profitable in a competitive banking system. Prudential regulation also acts as a constraint ...
... ‘multiplied up’ into more loans and deposits. Although commercial banks create money through lending, they cannot do so freely without limit. Banks are limited in how much they can lend if they are to remain profitable in a competitive banking system. Prudential regulation also acts as a constraint ...
Money creation in the modern economy
... ‘multiplied up’ into more loans and deposits. Although commercial banks create money through lending, they cannot do so freely without limit. Banks are limited in how much they can lend if they are to remain profitable in a competitive banking system. Prudential regulation also acts as a constraint ...
... ‘multiplied up’ into more loans and deposits. Although commercial banks create money through lending, they cannot do so freely without limit. Banks are limited in how much they can lend if they are to remain profitable in a competitive banking system. Prudential regulation also acts as a constraint ...
PDF of this report - Center on Budget and Policy Priorities
... including the Federal Reserve,7 and approximately two decades of relatively stable growth and low inflation followed.8 During this time, the Fed did not follow an explicit rule for monetary policy, but instead used discretion to pursue macroeconomic and price stability. The question of whether to co ...
... including the Federal Reserve,7 and approximately two decades of relatively stable growth and low inflation followed.8 During this time, the Fed did not follow an explicit rule for monetary policy, but instead used discretion to pursue macroeconomic and price stability. The question of whether to co ...
Money Supply and Inflation: How and How Much Can the Money
... If real income were constant and other factors did not affect the demand for money or were constant, then there would be a proportional relationship between the price level and the nominal quantity of money relative to real income. In other words, growth rate of money supply would be equal to the in ...
... If real income were constant and other factors did not affect the demand for money or were constant, then there would be a proportional relationship between the price level and the nominal quantity of money relative to real income. In other words, growth rate of money supply would be equal to the in ...
On the Equivalence of Money Growth and Interest Rate Policy
... has emerged in the recent past on the ability of simple interest rate rules to summarize the behavior of central banks, as, for example, demonstrated by Taylor (1993) or Clarida et al. (2000). On the other hand, it has been argued that the central bank actually controls the growth rate of a narrow m ...
... has emerged in the recent past on the ability of simple interest rate rules to summarize the behavior of central banks, as, for example, demonstrated by Taylor (1993) or Clarida et al. (2000). On the other hand, it has been argued that the central bank actually controls the growth rate of a narrow m ...
Chapter 1: Introduction
... Should the price level be for some reason momentarily lower than the quantity equation predicts, households and businesses will note that they have more wealth in the form of readily-spendable purchasing power they wish. They will accelerate their purchases for a little while to reduce their liquidi ...
... Should the price level be for some reason momentarily lower than the quantity equation predicts, households and businesses will note that they have more wealth in the form of readily-spendable purchasing power they wish. They will accelerate their purchases for a little while to reduce their liquidi ...
Monetary Policy Implementation: Operational Issues for
... money instead of reserve balances typically results in unwarranted day-to-day volatility in short-term interest rates that muddles the policy signal and hampers its transmission along the yield curve.5 Excessive high-frequency interest rate volatility, and the associated high liquidity risk, may als ...
... money instead of reserve balances typically results in unwarranted day-to-day volatility in short-term interest rates that muddles the policy signal and hampers its transmission along the yield curve.5 Excessive high-frequency interest rate volatility, and the associated high liquidity risk, may als ...
Chapter 10
... the hands of the public. ─ Reserves: All bank deposits with the Fed. The Fed sets the required reserve ratio. Any reserves deposited with the Fed beyond this amount are excess reserves. ─ The sum of these two items is the monetary base. ...
... the hands of the public. ─ Reserves: All bank deposits with the Fed. The Fed sets the required reserve ratio. Any reserves deposited with the Fed beyond this amount are excess reserves. ─ The sum of these two items is the monetary base. ...
Download paper (PDF)
... funds rate was increased. This is exactly what happened from February until November 1994 when after each 25 basis point increase in the federal funds rate, the interest rates on long-term Treasury bonds would rise a similar amount. As I can attest, because I saw this from the inside when I was the ...
... funds rate was increased. This is exactly what happened from February until November 1994 when after each 25 basis point increase in the federal funds rate, the interest rates on long-term Treasury bonds would rise a similar amount. As I can attest, because I saw this from the inside when I was the ...
The theoretical framework of monetary policy revisited
... Friedman’s famous dictum (Friedman, 1963, p.17). Given that monetary policy decisions are made by most central banks with regard to the interest rate, changes in this rate, by influencing aggregate demand and the gap between actual output and its potential level, impact on inflation via the New-Keyn ...
... Friedman’s famous dictum (Friedman, 1963, p.17). Given that monetary policy decisions are made by most central banks with regard to the interest rate, changes in this rate, by influencing aggregate demand and the gap between actual output and its potential level, impact on inflation via the New-Keyn ...
Monetary Policy in a Channel System!
... policy implementation. However, our analysis reveals that a characterization of optimal policy and its implementation cannot be separated. To see this, consider any interest-rate rule in a system with zero deposit rate as operated, for example, by the US Federal Reserve System. Such an interest-rate ...
... policy implementation. However, our analysis reveals that a characterization of optimal policy and its implementation cannot be separated. To see this, consider any interest-rate rule in a system with zero deposit rate as operated, for example, by the US Federal Reserve System. Such an interest-rate ...
Money demand and the role of monetary indicators in
... overhang. According to Amisano and Fagan (2010), broad money growth corrected for trend velocity and potential output growth is a leading indicator for switches between inflation regimes. While most of the papers are based on data ending at the very beginning of the ECB period, our analysis produces ...
... overhang. According to Amisano and Fagan (2010), broad money growth corrected for trend velocity and potential output growth is a leading indicator for switches between inflation regimes. While most of the papers are based on data ending at the very beginning of the ECB period, our analysis produces ...