Federal Reserve Policy viewed through a Money Supply Loss

Arbeitspapier

Federal Reserve nonborrowed reserve supply systematically responded to changes in inflation and in the output gap over the period 1969-2000. While the feedback from output gap is always negative, the response of money supply to changes in inflation varies considerably across time. Nonborrowed reserves decreased with inflation in the post-1979 period and increased in the pre-1979 period. Applying a standard macro-model, the estimated reaction functions are shown to ensure equilibrium determinacy. Viewed through the money supply lens, Federal Reserve policy substantially changed over time, but has never allowed for endogenous fluctuations, which contrasts conclusions drawn from federal funds rate analyses.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Tinbergen Institute Discussion Paper ; No. 08-023/2

Classification and Topics

• Classification: Wirtschaft ; Money Supply; Credit; Money Multipliers ; Monetary Policy ; Business Fluctuations; Cycles
• Subject: Money supply ; reaction functions ; nonborrowed reserves ; real-time data ; equilibrium determinacy ; Geldpolitik ; Geldmenge ; Schätzung ; USA

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Chowdhury, Ibrahim ; Schabert, Andreas
• Event: Veröffentlichung
• (who): Tinbergen Institute
• (where): Amsterdam and Rotterdam
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/86996
• Last update: 10.03.2025, 11:42 AM CET