Monetary Control Under Lagged Reserve Accounting.
In this paper we show that accurate money stock control is possible only under assumptions about the form of the money demand function which are probably not satisfied empirically. It follows that, while somewhat more accurate monetary control would be possible if the Federal Reserve were willing to...
| Publicado en: | Southern Economic Journal Vol. 46; no. 2; pp. 460 - 471 |
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| Formato: | Artículo |
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Wiley-Blackwell
Oct79
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| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=hlh&AN=4626327&site=ehost-live header: @attributes: shortDbName: hlh uiTerm: 4626327 longDbName: Humanities International Complete uiTag: AN controlInfo: bkinfo: jinfo: jid: 00384038 SEJ jtl: Southern Economic Journal issn: 00384038 maglogo: N pubinfo: dt: Oct79 vid: 46 iid: 2 pid: 480 pub: Wiley-Blackwell artinfo: ui: 4626327 10.2307/1057419 ppf: 460 ppct: 11 formats: tig: atl: Monetary Control Under Lagged Reserve Accounting. aug: au: Leroy, Stephen F. su: Monetary policy Accounting sug: subj: Monetary policy Accounting ab: In this paper we show that accurate money stock control is possible only under assumptions about the form of the money demand function which are probably not satisfied empirically. It follows that, while somewhat more accurate monetary control would be possible if the Federal Reserve were willing to countenance greater variation in interest rates, substantially constant rates of monetary expansion cannot be achieved. <BR> The monetary control theory just presented allows determination of the conditions under which accurate control of the money stock is possible, and therefore under which the criticisms of the Federal Reserve alluded to in the introduction may be justified.[11] Our principal result is that under lagged reserve accounting these conditions relate exclusively to the form of the money demand function. The money stock can be accurately controlled without excessive volatility in interest rates to the extent that the money demand equation (1) has a relatively high interest rate elasticity, (2) implies that there is little or no lag between interest rate changes and the consequent variations in money demand, (3) has a low error variance, and (4) can be reliably estimated empirically. To the extent that these conditions fail, on the other hand, monetary control can be achieved only at the cost of substantial interest rate volatility, or not at all. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: Y dt: @attributes: year: 1979 holdings: @attributes: islocal: N |
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