Although the Bank of Canada admits asset prices are considered in its policy deliberations because of their effects on inflation or output gap, the Bank of Canada denies trying to stabilize asset prices around fundamental values. However, since the start of the Bank of Canada we have seen a boom...

This paper relates Keynes's discussions of money, the state theory of money, financial markets, investors' expectations, uncertainty, and liquidity preference to the dynamics of government bond yields for countries with monetary sovereignty. Keynes argued that the central bank can influence the...

In this article, an open-economy optimal monetary rule is estimated for Colombia over the period 1991-2006 using the Generalized Method of Moments (GMM). The results show that in 1991-1999 the monetary authorities had two targets: one for the inflation rate and another for the exchange rate. In...

The interest rate channel of monetary transmission is the link through which variations in Central Bank real interest rates influence aggregate output and prices. To check fluctuation in prices, the Central Bank of Nigeria has kept the monetary policy rate stable at 12 percent for the past three...

How should we think about the determination of interest rates in China after interest rate liberalisation? Would effective deposit rates, lending rates and bond yields move higher or lower? We argue that interest rates in a liberalised environment would need to be anchored by the conduct of...

This paper presents the results of a quantitative study of the implications of the zero lower bound on nominal interest rates which was undertaken in the context of the review of the ECBu0092s monetary policy strategy in Spring 2003. Focusing on the euro area, the paper provides an assessment of...

This paper employs stochastic simulations of a small structural rational expectations model to investigate the consequences of the zero bound on nominal interest rates. We find that if the economy is subject to stochastic shocks similar in magnitude to those experienced in the U.S. over the...

In January 2002, Turkey adopted implicit inflation targeting as monetary policy. The short-term interest rate of the Central Bank of the Republic of Turkey would serve as instrument and should influence the secondary market interest rate. Using a Vector Error Correction Model, we analyze the...

This paper relates Keynes's discussions of money, the state theory of money, financial markets, investors' expectations, uncertainty, and liquidity preference to the dynamics of government bond yields for countries with monetary sovereignty. Keynes argued that the central bank can influence the...

In this study, we aim to investigate relationship between interest rate and consumer price index in Austria by using quarterly data belonging 1990:Q1 to 2013:Q4.period in the context of Fisher (1930) hypothesis. We employ linear unit root test and causality tests. according to linear Granger...