Arbeitspapier
Monetary policy with imperfect signals: The target problem in a new monetarist approach
The target problem considers the central bank's use of optimal tools and targets for purposes of stabilization and welfare optimization. In this study, this question is answered anew in a microfounded approach. By adding imperfect information to the model of [Berentsen and Waller, 2011], a divide between an interest rate policy and a money stock policy emerges. Given this, the usefulness of each policy is analyzed, with the ultimate result being the dominance of a pro-cyclical interest rate-based policy. This finding stands in contrast to the well-known macrofounded answer of [Poole, 1970]. The inconsistency is resolved by an examination of some of the axioms underlying New Keynesian and New Monetarist models.
- Language
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Englisch
- Bibliographic citation
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Series: Working Paper ; No. 296
- Classification
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Wirtschaft
Demand for Money
Monetary Policy
- Subject
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Money
search
stabilization
monetary policy
- Event
-
Geistige Schöpfung
- (who)
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Draack, Hannes
- Event
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Veröffentlichung
- (who)
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University of Zurich, Department of Economics
- (where)
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Zurich
- (when)
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2018
- Handle
- Last update
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10.03.2025, 11:43 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Draack, Hannes
- University of Zurich, Department of Economics
Time of origin
- 2018
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