This article provides a comparative analysis of central bank operating procedures in Australia and the United States. It also examines the effect that the structure of overnight money markets, reserve requirements, and central bank lending procedures have on monetary control in both countries....

This paper studies the effects of fiscal policies -- depicted as stochastic changes in government spending and distortionary tax rates -- when the government is constrained from using lump sum taxes for achieving intertemporal budget balance. The ratio of debt to gnp, therefore, has consequences...

This paper presents a general equilibrium monetary model in which inflation distorts a variety of marginal decisions. Although individually none of the distortions is very large, they combine to yield substantial welfare cost estimates. A sustained 4% inflation like that experienced in the U.S....

Real business cycle models have recently been applied to settings in which equilibria are suboptimal. In most models the solutions are approximated using some type of linearization with little attention being given to the accuracy of the approximation. In this paper we investigate three...

This paper provides a detailed examination of various money stock control procedures in a rational expectations environment. The analysis investigates the relative efficiency of controlling monetary aggregate through the use of an interest rate instrument or through various reserve measures...

The Economic Recovery Act of 1981 led to the largest postwar decline in effective tax rates on capital. The legislation also had its most significant effect on rates in 1982 due to the rapid decline in inflation. Although some of the tax cut was rescinded in 1982, effective corporate tax rates...

The behavior of the Federal Reserve System can be characterized as secretive with respect to its control of monetary aggregates. One common justification for this secrecy is that markets will overreact to information, causing undue variability in interest rates. However, the consequences of...

Monetary economists have recently begun a serious study of money supply rules that allow the Fed to adjustably peg the nominal interest rate under rational expectations. These rules vary from procedures that produce stationary nominal magnitudes to those that generate nonstationarities in...

The idea of totally deregulating the financial system and implementing monetary policy through currency control has received renewed attention. An important aspect concerning the desirability of using currency as the instrument of policy is the behavior of the demand for currency. If currency...

During the mid-1970s standard regressions explaining the demand for money underwent a well-documented shift. This shift was largely attributed to the adoption of more sophisticated methods of cash management practices by firms. Specifically, techniques were developed that allowed firms to...