Monetary Policy Implementation: Misconceptions and Their Consequences

Disyatat, Piti

doi:10.2139/ssrn.1334134

Cited by 69 publications

(52 citation statements)

References 59 publications

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“…Although the use of short-term interest rates in examining monetary policy is subject to debate, I deem that short-term rates will suffice for the purpose of this research. Disyatat discusses that short-term interest rates are often an operational target in central banks [14]. He also explains monetary authorities "exercise a close influence" on interest rate in order to give a consistent signal to the market.…”

Section: Policy Spillovers To Emerging Market Economiesmentioning

confidence: 99%

Heterogeneity of Monetary Policy Spillovers to Monetary Responsiveness in Emerging Market Economies

Shirakawa¹

2017

IJTEF

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Abstract-Discussions about monetary policy spillovers increased as major advanced economies move to policy normalization. In this paper, I investigate the differences in policy spillovers on monetary policy setting of emerging market economies. In particular, I investigated how interest differentials from major advanced economies, US, ECB and Japan, influence the movements of interest rates in emerging market economies. Using panel fixed effects regression, the results of this study show heterogeneity in the significance of policy spillover from US, ECB and Japan to emerging market economies. The results support previous findings that international monetary policy spillovers influence movements in short term interest rates, which is not explained by policy factors.

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Section: Policy Spillovers To Emerging Market Economiesmentioning

confidence: 99%

Heterogeneity of Monetary Policy Spillovers to Monetary Responsiveness in Emerging Market Economies

Shirakawa¹

2017

IJTEF

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“…They note, for instance, that event studies show no relationship between the quantity of bank reserves and the level of short-term interest rates (Friedman and Kuttner 2010). Further, they argue that CBs no longer set shortterm interest rates this way and that today this process generally involves little or no variation in the supply of CB liabilities (Disyatat 2008;Friedman and Kuttne, 2010). Instead, they insist that CBs control short-term interest rates because, as the monopoly suppliers of base money, they can set both the quantity and the terms on which the latter is provided.…”

Section: Divorcing Reserves Policy From Interest Rate Policy: the "Dementioning

confidence: 99%

Quantitative Easing, Functional Finance, and the 'Neutral' Interest Rate

Palacio-Vera

2011

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. * A previous draft of this paper was presented at the conference "Economic Policies of the New Thinking in Economics," which took place at St. Catharine´s College, Cambridge, UK, April 14, 2011. The author would like to thank Philip Arestis for giving him the opportunity to present this work, as well as several participants in the conference for their comments on the paper. The author is also grateful to Luis Alberto Alonso González, who provided the initial stimulus for this project. The usual disclaimer applies. Terms of use: Documents inThe Levy Economics Institute Working Paper Collection presents research in progress by Levy Institute scholars and conference participants. The purpose of the series is to disseminate ideas to and elicit comments from academics and professionals.Levy Economics Institute of Bard College, founded in 1986, is a nonprofit, nonpartisan, independently funded research organization devoted to public service. Through scholarship and economic research it generates viable, effective public policy responses to important economic problems that profoundly affect the quality of life in the United States and abroad. ABSTRACTThe main purpose of this study is to explore the potential expansionary effect stemming from the monetization of debt. We develop a simple macroeconomic model with Keynesian features and four sectors: creditor households, debtor households, businesses, and the public sector. We show that such expansionary effect stems mainly from a reduction in the financial cost of servicing the public debt. The efficacy of the channel that allegedly operates through the compression of the risk/term premium on securities is found to be ambiguous. Finally, we show that a country that issues its own currency can avoid becoming stuck in a structural "liquidity trap," provided its central bank is willing to monetize the debt created by a strong enough fiscal expansion.

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“…Los detalles de estos mercados son relevantes para el aná-lisis monetario y macroeconómico. Se ha argumentado que el modo en que los bancos centrales determinan los tipos de interés a corto no es a través de la cantidad de dinero que ofrecen, sino a través de los términos en que se proporciona (Disyatat 2008). Es posible también que intenten reelaborar una medida más completa de la liquidez de los mercados financieros con el fin de anticipar la presencia de burbujas en los mercados de activos e inmobiliario.…”

Section: La Estrategia Directaunclassified

La crisis financiera actual y la política monetaria: algunas lecciones para el futuro

García-Brazales

2009

Cuadernos de Economía

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PresentaciónDespués de un período inusualmente largo de estabilidad macroeconómica en las principales economías del mundo, los acontecimientos que se han sucedido desde septiembre de 2008 y la fuerte corrección a la baja que están sufriendo tanto las perspectivas de crecimiento económico e inflación como los mercados financieros, están planteando en los medios académicos y políticos importantes cuestiones acerca de la eficacia de las estrategias e instituciones de política económica que hasta hace pocos meses actuaban como garantes de dicha estabilidad. Sin embargo, se tardará aún mucho tiempo en hacer un análisis riguroso de las causas y efectos de una secuencia de acontecimientos a todas luces completamente inesperados (al menos si atendemos a la cascada de revisiones de las previsiones por parte de las principales instituciones internacionales); y mucho más aún en diseñar y poner en marcha medidas concretas que, al menos, minimicen sus efectos en el hipotético caso de que vuelvan a producirse.A pesar de la provisionalidad de muchos de los diagnósticos que se están haciendo en estos momentos y la improvisación -forzada por las circunstancias-de muchas de las medidas que se están adoptando, podemos hacernos ya una idea aproximada de las razones por las que se ha llegado a esta situación y de las implicaciones que pueden tener en un futuro.

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Monetary Policy Implementation: Misconceptions and Their Consequences

Cited by 69 publications

References 59 publications

Heterogeneity of Monetary Policy Spillovers to Monetary Responsiveness in Emerging Market Economies

Heterogeneity of Monetary Policy Spillovers to Monetary Responsiveness in Emerging Market Economies

Quantitative Easing, Functional Finance, and the 'Neutral' Interest Rate

La crisis financiera actual y la política monetaria: algunas lecciones para el futuro

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