Linear quadratic optimal control techniques are applied to a simplified reduced form model of the Australian money market to examine the tradeoff between improved monetary control and interest rate variability. We focus on a series of questions. Is quarterly control of the money supply feasible...

Variation in the Australian money supply is analyzed in two frameworks: (1) the “formations table†framework; and (2) a framework obtained by modifying traditional monetary decomposition to accommodate the ability of Australian banks to change their LGS assets by transacting with the...

This paper analyses the capital adequacy provisions introduced by the Reserve Bank of Australia from September, 1988 and examines its initial application to three major Australian banks. This risk-adjusted capital adequacy ratio is partial in its coverage and thus a misleading measure of total...

A comparison of the standard deviation of the difference in growth rates of the momentary base and money for the U.S. and Australia indicates much larger variation in the latter case. The larger Australian deviation is explained by differing institutional frameworks within and through which...

Linear quadratic optimal control techniques are applied to a simplified reduced form model of the Australian money market to examine the tradeoff between improved monetary control and interest rate variability. We focus on a series of questions. Is quarterly control of the money supply feasible...