Traditional monetary theory has largely ignored the role ofbank equity. Bank-centered accounts of how monetarypolicy affects the real economy usually focus on the role ofreserves and reserve requirements in determining the volumeof demand deposits and, in the case of the bank lendingchannel,...

[...]The first intellectual development challenging the use ofan activist monetary policy to stimulate output and reduceunemployment is the finding, most forcefully articulatedby Milton Friedman, that the effects of monetary policyhave long and variable lags.1 The uncertainty of the timingand...

[...]In the case studies that follow, we will see that thedesign choices for an inflation-targeting regime fall intofour basic categories: definition and measurement of thetarget, transparency, flexibility, and timing.[...]

Many features of the German monetary targetingregime are also key elements of inflationtargeting in the other countries examined inthis study. Indeed, as pointed out in Bernanke and Mishkin(1997), Germany might best be thought of as a “hybrid”inflation targeter, in that it has more in common...

[...]This paper traces the evolution of Fedwire fromtwelve separate payment operations, linked only by aninterdistrict communications arrangement, to a more unifiedand efficient system. Our account highlights both thedifficulties the Federal Reserve encountered as it soughtto standardize and...

While consumption habits have been utilised as a means of generating a hump shapedoutput response to monetary policy shocks in sticky-price New Keynesian economies,there is relatively little analysis of the impact of habits (particularly, external habits) onoptimal policy. In this paper we...

In practice, central banks have been confronted with a trade-off between stabilising inflation and output when dealing with rising oil prices. This contrasts with the result in the standard New Keynesian model that ensuring complete price stability is the optimal thing to do, even when an oil...

Das vorliegende Papier beschäftigt sich mit der Frage, wie viele ausländische Euro-Münzenpro Tag in ein Euro-Land einströmen. Dafür formulieren wir ein kleines formalmathematischesModell, das wir für den Fall Deutschlands und 1-Euro-Münzen kalibrieren.Die Einführung der Euro-Münzen 2002...

This paper analyzes the recently documented instability of money demand in theeuro area in the framework of a Markov switching trend model. First, we consider astandard flexible price model with stable money demand, rational expectations, andan exogenous income-money ratio which follows a Markov...

Based on an experimental analysis of a simple monetary economy we argue that a monetary system is more stable than one would expect from individual rationality. Weshow that positive reciprocity stabilizes the monetary system, provided everyparticipant considers accepting money as a reasonable...