scholarly journals Should the Federal Reserve Regularly Evaluate Its Monetary Policy Framework?

2018 ◽  
Vol 2018 (2) ◽  
pp. 443-517
Author(s):  
Jeff Fuhrer ◽  
Giovanni P. Olivei ◽  
Eric S. Rosengren ◽  
Geoffrey M.B. Tootell
Keyword(s):  
Monetary Policy ◽  
Federal Reserve ◽  
Policy Framework ◽  
Monetary Policy Framework

scholarly journals When the Fed Speaks: Arguments, Emotions, and the Microfoundations of Institutions

2018 ◽  
Vol 64 (3) ◽  
pp. 542-575 ◽  
Author(s):  
Derek J. Harmon
Keyword(s):  
United States ◽  
Monetary Policy ◽  
Financial Crisis ◽  
Financial Market ◽  
Federal Reserve ◽  
The United States ◽  
Policy Framework ◽  
Trade Offs ◽  
Business Media ◽  
Monetary Policy Framework

This study investigates what happens when a prominent leader explicitly reaffirms the taken-for-granted assumptions underlying an institution. While such efforts are usually made to reinforce the institution, I theorize that they actually destabilize the institution and create collective uncertainty by reopening the very considerations that people take for granted. Using speeches made by the chair of the United States Federal Reserve from 1998 to 2014, I demonstrate that reaffirming the taken-for-granted assumptions underlying the monetary policy framework creates uncertainty in the broader financial market. This market reaction is also influenced by emotions present at the time of the speech that shape how the event is interpreted. Speeches conveyed in an overall more positive tone suppress this reaction, while more fear in the business media amplifies it. Moreover, supplementary analyses conducted on speeches during the financial crisis suggest that when the taken-for-grantedness of these assumptions has weakened, reaffirming them no longer creates uncertainty to the same extent. This study expands our understanding of the consequences of communication in market contexts, raises important questions about the trade-offs between public transparency and market stability, and contributes new insights to research on the cognitive and emotional microfoundations of institutions.

scholarly journals Monetary Policy in the Post Keynesian Theoretical Framework

2017 ◽  
Vol 37 (1) ◽  
pp. 45-64
Author(s):  
FÁBIO HENRIQUE BITTES TERRA ◽  
PHILIP ARESTIS
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Inflation Targeting ◽  
Debt Management ◽  
Policy Framework ◽  
Original Writings ◽  
Policy Model ◽  
Original Contribution ◽  
The Interest Rate ◽  
Monetary Policy Framework

ABSTRACT The purpose of this contribution is to develop a Post Keynesian monetary policy model, presenting its goals, tools, and channels. The original contribution this paper develops, following (Keynes’s 1936, 1945) proposals, is the use of debt management as an instrument of monetary policy, along with the interest rate and regulation. Moreover, this paper draws its monetary policy model by broadly and strongly relying on Keynes’s original writings. A monetary policy model erected upon this basis relates itself directly to the Post Keynesian efforts to offer a monetary policy framework substantially different from the Inflation Targeting Regime of the New Macroeconomic Consensus.

Avoiding Dark Corners: A Robust Monetary Policy Framework for the United States

2015 ◽  
Author(s):  
Ali Alichi ◽  
Kevin Clinton ◽  
Charles Freedman ◽  
Ondra Kamenik ◽  
Michel Juillard ◽  
...  
Keyword(s):  
United States ◽  
Monetary Policy ◽  
The United States ◽  
Policy Framework ◽  
Monetary Policy Framework

scholarly journals On the (Ir)Relevance of Monetary Aggregate Targeting in Pakistan: An Eclectic View

2013 ◽  
Vol 18 (2) ◽  
pp. 65-119
Author(s):  
Adnan Haider ◽  
Asad Jan ◽  
Kalim Hyder
Keyword(s):  
Monetary Policy ◽  
Money Demand ◽  
Demand Function ◽  
Policy Framework ◽  
Monetary Aggregate ◽  
Money Demand Function ◽  
Financial Innovations ◽  
The Stability ◽  
Nominal Anchor ◽  
Monetary Policy Framework

This study attempts to identify a stable money demand function for Pakistan’s economy, where the monetary aggregate is considered the nominal anchor. With evolving financial innovations and regulations, the stability of money demand has been the focus of numerous debates. Where earlier studies have provided conflicting explanations due to inadequate specifications and imprecise estimations, we find that money demand in Pakistan is stable, if specified properly. For developing countries such as Pakistan, it is important to target monetary aggregates or respond to deviations from the desirable path if monetary policy is to be effectively implemented and communicated; this should remain, if not a primary, then an auxiliary target in the monetary policy framework.

scholarly journals Monetary Policy Normals, Future and Past

2017 ◽  
Vol 241 ◽  
pp. R5-R12 ◽  
Author(s):  
Peter Sinclair ◽  
William A. Allen
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Central Banks ◽  
Policy Framework ◽  
Current Policy ◽  
Macroprudential Policy ◽  
New Normal ◽  
Policy Measures ◽  
The Uk ◽  
Monetary Policy Framework

The paper looks at the ‘new normal’ in so many of the world's central banks, and specifically the UK. It examines the position of the monetary policy framework, instrument settings, the underlying models, unconventional policy measures, real interest rates, and the interface with macroprudential policy. It explores both the advantages and challenges involved in any move to return towards pre-crisis arrangements, and offers suggestions for possible ways in which current policy dilemmas might be resolved.

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