Monetarism rides again? : US monetary policy in a world of quantitative easing

Vo Phuong Mai Le; David Meenagh; Patrick Minford

This paper gives money a role in providing cheap collateral in a model of banking; besides the Taylor Rule, monetary policy can affect the risk-premium on bank lending to firms by varying the supply of M0, so at the zero bound monetary policy is effective; fiscal policy crowds out investment via the risk-premium. A rule for making M0 respond to credit conditions can enhance the economy's stability. Both price-level and nominal GDP targeting rules for interest rates combined with this stabilise the economy further. With these rules for monetary control, aggressive and distortionary regulation of banks' balance sheets becomes redundant.

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Year of publication:	2014
Authors:	Le, Vo Phuong Mai ; Meenagh, David ; Minford, Patrick
Publisher:	Cardiff : Cardiff Univ, Cardiff Business School, Economics Section
Subject:	DSGE model \| Financial Frictions \| Crises \| Indirect Inference \| money supply \| QE \| monetary policy \| fiscal multiplier \| zero bound \| Geldpolitik \| Monetary policy \| Geldmengensteuerung \| Monetary targeting \| Niedrigzinspolitik \| Low-interest-rate policy \| Neoklassische Synthese \| Neoclassical synthesis \| DSGE-Modell \| Kreditmarkt \| Credit market \| Akzelerator \| Accelerator \| Theorie \| Theory \| Schätzung \| Estimation \| Finanzkrise \| Financial crisis \| USA \| United States \| Geldpolitische Transmission \| Monetary transmission \| 1984-2011

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Extent:	Online-Ressource (46 S.) graph. Darst.
Series:	Cardiff economics working papers. - Cardiff : [Verlag nicht ermittelbar], ISSN 1749-6101, ZDB-ID 2257349-5. - Vol. E2014/22
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Notes:	Systemvoraussetzungen: Acrobat Reader
Other identifiers:	hdl:10419/109070 [Handle]
Classification:	E3 - Prices, Business Fluctuations, and Cycles ; E44 - Financial Markets and the Macroeconomy ; E52 - Monetary Policy (Targets, Instruments, and Effects) ; C1 - Econometric and Statistical Methods: General
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10010429162