Woodford (2007) argues that it is not appropriate to regard inflation in the steady state of New Keynesian models as determined by steady-state money growth. Woodford instead argues that the intercept term in the monetary authority's interest-rate policy rule determines steady-state inflation....

Monetary assets have different characteristics which make them more or less useful in facilitating transactions. Academic economists have consistently argued that these differences should be incorporated in monetary aggregates by assigning assets different weights. However, central banks...

This report is one of the first studies discussing monetary base analysis and control model, a concept even today is alive and more developed by, for example, by IMF to use its analysis. The study presents monetary base approach to control of money flows and the links between monetary base,...

This analysis of Allan Meltzer's analytical framework focuses on the role that Meltzer assigned to the monetary base. For many years, Meltzer suggested that central banks should use the monetary base as their policy instrument, in place of a short-term nominal interest rate. However, he...

The zero lower bound and quantitative easing policies have rekindled interest in the link between monetary aggregates and the business cycle. This paper argues, on the basis of Bayesian time-varying coefficient VAR models that use Divisia indexes, that money is more closely linked to the...

A challenge for quantity-theoretic explanations of business cycles is that recessions manifest despite central banks' scrupulousness to avoid falls in monetary aggregates, a fact which would seem to indicate a structural explanation. This paper argues that a broader and theoretically richer...

This paper introduces a generalized money (M2) multiplier formula to the literature for a monetary system with Reserve Option Mechanism (ROM). Various features of the proposed multiplier are then explored using monthly Turkish data during the decade 2005 to 2015. We report a step increase in the...

In modern market economies, money supply depends more on liquid debt securities, such as deposits and commercial paper, created by financial intermediaries. However, the recent financial crisis has exposed the fragility of this source of liquidity. This paper outlines a model in which currency,...

This paper demonstrates how a target for money growth can be beneficial for an inflation targeting central bank acting under discretion. Because the growth rate of money is closely related to the change in the interest rate and he growth of real output, delegating a money growth target to the...