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We examine the conduct of monetary policy in a world where the supply of outside money is controlled by the fiscal authority-a scenario increasingly relevant for many developed economies today. Central bank control over the long-run inflation rate depends on whether fiscal policy is Ricardian or...
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Currency in circulation, together with demand deposits, is a component of narrow money which movements are of special … interest for policy makers. There are several relevant indicators showing the relative significance of the currency in … circulation in particular economy, among which the most important ones are: 1/ share of currency in circulation in money supply …
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The design of monetary policy depends upon the targeting strategy adopted by the central bank. This strategy describes a set of policy preferences, which are actually the structural parameters to analyse monetary policy making. Accordingly, we develop a novel calibration method to identify...
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