Innovation in monetary policy

Niehans, Jürg

doi:10.1016/0378-4266(82)90016-4

Cited by 17 publications

(29 citation statements)

References 12 publications

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“…In 1980, Mrs Thatcher (guided by her advisor Alan Walters) called in the Swiss economist Jurg Niehans to advise her on monetary policy issues. Niehans' advice was not published, 18 but he did outline his assessment at one of the MSG's regular seminars at LSE in late 1980, and he published much of what he made of the UK experience in Niehans (1982):…”

Section: The Oxford Yearsmentioning

confidence: 99%

The Money Study Group (MSG) at fifty: Twenty years of the MSG and another thirty of the Money, Macro, Finance Research Group (MMF)

Chrystal

Capie

2020

The Manchester School

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After WWII the monetary environment had been dramatically affected by the measures needed for financing the war. Government debt had soared to over 250% of GDP. The commercial banks' balance sheets were greatly distorted with advances to the private sector having shrunk from over 50% of assets in the prewar period to around 15%. The banks were keen to restore "normality" and lend while government was looking to borrow and to restrict advances to the private sector. There were extensive controls on banks, including quantitative controls on lending and strict foreign exchange controls. These controls were still thought to be necessary in the postwar period as the pound was pegged to the US dollar, the country was short of reserves and the balance of payments was weak. The old

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Section: The Oxford Yearsmentioning

confidence: 99%

The Money Study Group (MSG) at fifty: Twenty years of the MSG and another thirty of the Money, Macro, Finance Research Group (MMF)

Chrystal

Capie

2020

The Manchester School

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“…The model used to address a “moneyless” economy by Niehans (1982) is based on an earlier model outlined in The Theory of Money (Niehans, 1978). This section introduces the model beginning with the microeconomic foundations of the framework and extends these foundations to an aggregate model.…”

Section: Niehans’s Modelmentioning

confidence: 99%

“…The result obtains even in the case of the general equilibrium model above. 8 As Niehans (1982, p. 22) argues, “In the absence of transactions costs there is no reason to hold money stocks.”…”

Section: Niehans’s Modelmentioning

confidence: 99%

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Jürg Niehans and the Cashless Economy

Hendrickson

2017

The American Economist

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Information technology has the potential to decrease substantially, if not completely, the demand for base money. This poses a problem for central banks as it seemingly eliminates a role for monetary policy, at least in the traditional sense. Recently, it has become commonplace to consider the role of monetary policy and the determination of the price level without any reference to money. The two predominant methods of analysis in this regard are the New Keynesian framework articulated by Woodford and the fiscal theory of the price level as described in Cochrane. Lost in the literature on “cashless” economies is the work of Jürg Niehans who, driven by the perplexities of the Eurodollar market, considered the role of monetary policy and price-level determination in the context of a neoclassical macroeconomic model. This article contrasts the framework and conclusions of Niehans with the contemporary approaches. It is argued that Niehans successfully anticipated the conclusions of the fiscal theory of the price level. JEL Classification: E52, E63

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“…In addition, this elasticity may have declined due to increased financial innovation and deregulation, which may not be totally independent of the rise in volatility. See, for example, Lindsey (1977) and Niehans (1982).…”

Section: Persistence Of Money Surprisesmentioning

confidence: 99%

Monetary Policy Regimes, Expected Inflation, and the Response of Interest Rates to Money Announcements

Roley

Walsh

1985

The Quarterly Journal of Economics

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This paper examines the response of the term structure of interest rates to weekly money announcements. Estimated responses for both the pre-and post-October 1979 periods are first presented. Then, two competing hypotheses involving the policy anticipations and expected inflation effects are formally specified and compared to the estimated responses. Both hypotheses are found to be consistent with the responses, but they have sharply different implications about the Federal Reserve's shortrun monetary policy. The expected inflation hypothesis implies that weekly money surprises should have persistent effects on the level of the money stock, reflecting shifts in the Federal Reserve's long-run target. In contrast, the policy anticipations hypothesis implies that the effect of money surprises should diminish over time, reflecting the Federal Reserve's desire to offset deviations from target. Additional empirical results reported in the paper support this latter description of the money stock process.

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Innovation in monetary policy

Cited by 17 publications

References 12 publications

The Money Study Group (MSG) at fifty: Twenty years of the MSG and another thirty of the Money, Macro, Finance Research Group (MMF)

The Money Study Group (MSG) at fifty: Twenty years of the MSG and another thirty of the Money, Macro, Finance Research Group (MMF)

Jürg Niehans and the Cashless Economy

Monetary Policy Regimes, Expected Inflation, and the Response of Interest Rates to Money Announcements

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