Victor, Olivo (2005): Interest rate rules VS money growth rules: some theoretical issues and an empirical application for Venezuela. Published in: Serie Documentos de Trabajo Banco Central de Venezuela No. Documento Number 68 (February 2005)
Download (243kB) | Preview
This paper main theme is that the arguments against the use of money (i.e. money growth rate rules) in the conduct of monetary policy are not so strong, particularly for less developed economies. I analyze this topic in two ways: i) using some simple theoretical forward-looking macro models and evaluating their inflation and output variance under interest rate and monetary aggregates rules; ii) setting up models similar to the theoretical ones, but with more complex dynamics, assigning values to the parameters, and solving them for different kind of shocks under interest rate and monetary aggregates rules.
|Item Type:||MPRA Paper|
|Original Title:||Interest rate rules VS money growth rules: some theoretical issues and an empirical application for Venezuela|
|English Title:||Interest Rate Rules VS Money Growth Rules: Some Theoretical Issues and an Empirical Application for Venezuela|
|Keywords:||Interest Rate Rules, Money Growth, Monetary Police, Rate Rules|
|Subjects:||E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy|
|Depositing User:||Victor Olivo|
|Date Deposited:||13 Sep 2012 06:01|
|Last Modified:||23 Jan 2016 04:57|
ARREAZA, ADRIANA, ENID BLANCO, MIGUEL DORTA, 2003. A small scale macroeconomic model for Venezuela. Banco Central de Venezuela,Serie Documento de Trabajos, 43.
BALL, LAURENCE, 1999. Efficient rules for monetary policy. International Finance, 2, 63-83.
BALL, LAURENCE, NIAMH SHERIDAN, 2003. Does inflation targeting matter?, NBER Working Paper, 9577.
FRIEDMAN, MILTON, 1962. A program for monetary stability. Fordham University Press.
LANSING, KEVIN, BHARAT TREHAN, 2003. Forward-looking behavior and optimal discretionary monetary policy. Economics letters, 81, 249-256.
MCCALLUM, BENNETT, 1999. Recent developments in the analysis of monetary policy. Federal Reserve of St. Louis Review, November-December, Vol. 81, N° 6.
MCCALLUM BENNETT, EDWARD NELSON, 1999. An optimizing IS-LM specification for monetary policy and business cycle analysis.NBER Working Paper, 5875.42
MELTZER, ALLAN, 2001. The transmission process. Published in The Monetary Transmission Process. Edited by the Deutsche Bundesbank.
MISHKIN, FREDERIC, 2000. What should Central Banks do?, Federal Reserve Bank of St. Louis Review, November-December, Vol. 82,N° 6.
NELSON, EDWARD, 2002. Direct effects of base money on aggregate demand: theory and evidence. Journal of Monetary Economics,49, 687-708.
OLIVO, VÍCTOR, 2003. Interest rate rules and inflation targeting do not work with systematic foreign exchange market intervention. Banco Central de Venezuela, Serie Documentos de Trabajo, 41, March,2003.
POOLE, WILLIAM, (1994). Monetary aggregates targeting in a low inflation economy. Published in Goals, Guidelines, and Constraints Facing Monetary Policymakers; edited by Jeffrey Fuhrer. Federal Reserve Bank of Boston.
VON HAGEN, JURGEN, MANFRED NEUMANN, (2002). Does inflation targeting matter?, Federal Reserve Bank of St. Louis Review, July-August, Vol. 84, N° 4.
WALSH, CARL, 2003. Monetary theory and policy. Cambridge.
WOODFORD, MICHAEL, 2003. Interest and prices: Foundations of a theory. Princeton University Press.