Arbeitspapier

Monetary policy implementation frameworks: A comparative analysis

We compare two stylized frameworks for the implementation of monetary policy. The first framework relies only on standing facilities, and the second one relies only on open market operations. We show that the Friedman rule cannot be implemented in the first framework, but can be implemented using the second framework. However, for a given rate of inflation, we show that the first framework unambiguously achieves higher welfare than the second one. We conclude that an optimal system of monetary policy implementation should contain elements of both frameworks. Our results also suggest that any such system should pay interest on both required and excess reserves.

Sprache
Englisch

Erschienen in
Series: Staff Report ; No. 313

Klassifikation
Wirtschaft
Monetary Policy
Central Banks and Their Policies
Monetary Policy, Central Banking, and the Supply of Money and Credit: Other
Thema
Monetary policy implementation
standing facilities
open market operations
Geldpolitik
Offenmarktpolitik
Theorie

Ereignis
Geistige Schöpfung
(wer)
Martin, Antoine
Monnet, Cyril
Ereignis
Veröffentlichung
(wer)
Federal Reserve Bank of New York
(wo)
New York, NY
(wann)
2008

Handle
Letzte Aktualisierung
10.03.2025, 11:44 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Martin, Antoine
  • Monnet, Cyril
  • Federal Reserve Bank of New York

Entstanden

  • 2008

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