scholarly journals Central Bank Misperceptions and the Role of Money in Interest Rate Rules

2008 ◽  
Author(s):  
Guenter W. Beck ◽  
Volker Wieland
Keyword(s):  
Interest Rate ◽  
Central Bank ◽  
Interest Rate Rules

Money Supply Rules and Interest Rate Rules

2020 ◽  
pp. 77-82
Author(s):  
Harold L. Cole
Keyword(s):  
Interest Rate ◽  
Central Bank ◽  
Money Supply ◽  
Policy Rule ◽  
Interest Rate Rules

In this chapter we introduce various formulations of central bank policy rule consider their implications within the context of our model. We introduce preference shocks to our model to create a motivation for smoothing by the central bank.

Interest rate rules and equilibrium (in)determinacy in a small open economy: the role of internationally traded capital

2018 ◽  
Vol 18 (2) ◽  
Author(s):  
Wen-ya Chang ◽  
Hsueh-fang Tsai ◽  
Juin-jen Chang ◽  
Hsieh-yu Lin
Keyword(s):  
Interest Rate ◽  
Open Economy ◽  
Capital Mobility ◽  
Small Open Economy ◽  
International Capital ◽  
Interest Rate Rules ◽  
International Capital Mobility ◽  
Rate Feedback ◽  
Feedback Rule

Abstract This study develops a small-open-economy version of Benhabib, J., S. Schmitt-Grohé, and M. Uribe. 2001. “Monetary Policy and Multiple Equilibria.” American Economic Review 91: 167–186. We systematically explore the role of international capital mobility and the portfolio balance channel in terms of macroeconomic (in)stability when the government follows a commonly-adopted interest-rate feedback rule. In a one-traded-good model, the steady-state equilibrium, in general, is locally determinate; international capital mobility stabilizes the economy against business cycle fluctuations under a simple interest-rate feedback rule. In a two-good (traded and non-traded goods) model, the relationship between equilibrium (in)determinacy and the aggressiveness of interest rate rules is not monotonic, and crucially depends on households’ portfolio preferences. These results suggest that a unified interest rate rule can end up with very different consequences of macroeconomic (in)stability in an open economy from those in a closed economy.

scholarly journals FASILITAS DISKONTO (DISCOUNT WINDOWS) SEBAGAI INSTRUMEN MONETER DITINJAU DALAM PERSPEKTIF EKONOMI ISLAM

2019 ◽  
Vol 4 (1) ◽  
pp. 71
Author(s):  
RINA EL MAZA ◽  
EGI PUTRA SETIAWAN
Keyword(s):  
Interest Rate ◽  
Central Bank ◽  
Interest Rates ◽  
Commercial Banks ◽  
Profit Sharing ◽  
The Public ◽  
The Government ◽  
Islamic Economic ◽  
The Interest Rate

The government has an important role in the welfare of the people's economy. One of them is through the role of the central bank by carrying out monetary policy. This policy was adopted by the central bank or Bank Indonesia (BI) through several instruments, including through regulating discount rates for commercial banks. In this case, BI sets the inflation target as a reference for determining interest rates. When the inflation rate exceeds the targeted, BI will raise interest rates which in turn will reduce the credit issued by commercial banks to the public, because commercial banks must pay higher interest rates to the central bank. And the results of the analysis that the interest rate charged in the credit (Lending Facility) discount facility is classified as an act of usury. Meanwhile, the profits obtained from the deposit of funds in the Facility Deposit transaction are not permitted in the Islamic economy, because in the Islamic economy there is no interest rate but profit sharing, given the fixed and concrete interest rates. In addition, the discount facility is also incompatible with some Islamic economic principles, including; the principle of Illahiyah, Justice, and the government.

scholarly journals Central bank interest policy: conceptual concepts and socio-economic context

2021 ◽  
Vol 7 (Extra-E) ◽  
pp. 531-536
Author(s):  
Aleksandr N. Sukharev ◽  
Sergey N. Smirnov
Keyword(s):  
Interest Rate ◽  
Central Bank ◽  
Interest Rates ◽  
Interest Rate Policy ◽  
Economic Context ◽  
Negative Interest Rates ◽  
Interest Policy ◽  
Rate Policy ◽  
The Interest Rate

The article reveals the goals and mechanisms of the interest rate policy of the central bank. The role of the discount rate in ensuring financial and macroeconomic stability is shown. The Taylor rule is presented and justified in a modified form, by including the money supply parameter in it. The phenomenon of negative interest rates is revealed.

The Role of Central Bank in Competitive Environment

2020 ◽  
pp. 383-411
Author(s):  
Mustafa Eser Kurum ◽  
Suat Oktar
Keyword(s):  
Interest Rate ◽  
Central Bank ◽  
General Framework ◽  
Cointegration Analysis ◽  
Causality Analysis ◽  
Macroeconomic Impact ◽  
Macroeconomic Effects ◽  
Using Data ◽  
The Interest Rate

This chapter evaluates the macroeconomic impact of the interest rate corridor policy implemented by the central bank in Turkey. In this context, firstly the general framework, types and application of interest rate corridor policy are explained. Then, the interest rate corridor policy implemented by the CBRT after the global crisis was examined in detail. In addition, domestic and foreign literature examining the macroeconomic effects of the interest rate corridor policy has been included. This chapter examines the macroeconomic impact of the interest rate corridor policy implemented in Turkey using data from the 2011-2018 period. In the study, Engle-Granger Cointegration Analysis and Toda-Yamamoto Causality Analysis were used as models. As a result of the study, it was concluded that interest rate corridor had an effect on economic growth, foreign direct investment, and exchange rate variables.

scholarly journals The Central Bank Governor and Interest Rate Setting by Committee

2020 ◽  
Author(s):  
Emile van Ommeren ◽  
Giulia Piccillo
Keyword(s):  
Interest Rate ◽  
Central Bank ◽  
Political Party ◽  
The Political ◽  
Right Wing ◽  
Voting Behaviour ◽  
Jel Codes ◽  
Central Bank Governor ◽  
Committee Voting

Abstract This article studies the role of central bank governors in monetary policy decisions taken by a committee. To carry out this analysis, we constructed a novel dataset of committee voting behaviour for six OECD countries for up to three decades. Using a range of Taylor rule specifications, we show that a change in governor significantly affects interest rate setting. We also observe systematic differences in interest rate rules based on the political party appointing the governor, with more inflation-averse policies under governors that are appointed by a right-wing political authority. We show the robustness of this result by using a wider dataset (including over 3000 observations from 12 countries). (JEL codes: E02, E5, P16)

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