Maintaining low inflation: Money, interest rates, and policy stance

Reynard, Samuel

doi:10.1016/j.jmoneco.2007.06.018

Cited by 69 publications

(73 citation statements)

References 24 publications

(17 reference statements)

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“…While, sensitivity of money demand with respect to inflation tends are larger when real money holdings are too low. Reynard (2007) examine systematic relationship between money, prices and output and conclude that price movements are always related to earlier monetary developments in any economy, while significant monetary movements are always track by consequent price movements. Basco, D'Amato, and Garegnani (2009) analyze money with price relationship for Argentia and found that money and price relationship holds during high inflationary period.…”

Section: Literature Reviewmentioning

confidence: 99%

Inflation Prediction and Inflation Volatility for Turkey

Eygü¹,

Aksu²,

Moavia³

2015

MJSS

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Section: Literature Reviewmentioning

confidence: 99%

Inflation Prediction and Inflation Volatility for Turkey

Eygü¹,

Aksu²,

Moavia³

2015

MJSS

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“…Masuch and others 2001), but the approach also has no lack of critics. On the empirical level, Reynard (2007) and Nelson (2007) have pointed to the difficulties of identifying equilibrium changes in velocity in a plausible manner. And Gerlach andSvensson (2003, p.1653) rather bluntly state that "the microfoundations of the P* model are not clear (to us, at least)…," a sentiment echoed by André and others (2007).…”

Section: The P* Model: Money and The Price Levelmentioning

confidence: 99%

The ECB’s Monetary Analysis Revisited

Berger

Harjes²,

Stavrev³

2008

IMF Working Papers

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Monetary aggregates continue to play an important role in the ECB's policy strategy. This paper revisits the case for money, surveying the ongoing theoretical and empirical debate. The key conclusion is that an exclusive focus on non-monetary factors alone may leave the ECB with an incomplete picture of the economy. However, treating monetary factors as a separate matter is a second-best solution. Instead, a general-equilibrium inspired analytical framework that merges the economic and monetary "pillars" of the ECB's policy strategy appears the most promising way forward. The role played by monetary aggregates in such unified framework may be rather limited. However, an integrated framework would facilitate the presentation of policy decisions by providing a clearer narrative of the relative role of money in the interaction with other economic and financial sector variables, including asset prices, and their impact on consumer prices. Terms of use: Documents in EconStor mayJEL Classification Numbers: C11, C30, E31, E40

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“…For example, Reynard (2007) provides evidence to suggest there is a systematic empirical relationship between movements in money and subsequent prices and output. Using data for the US, the Euro area and Switzerland he …nds that monetary developments provide information about subsequent in ‡ation.…”

Section: Introductionmentioning

confidence: 99%

A Note on Money and the Conduct of Monetary Policy

2013

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Prior to the …nancial crisis mainstream monetary policy practice had become disconnected from money. We outline the basic rationale for this development using a simple model of money and credit in which we explore the conditions under which money matters directly for the conduct of policy. Then, drawing on Goodfriend and Terms of use: Documents in EconStor mayMcCallum's (2007) DSGE model, we examine the circumstances under which money becomes more closely linked to in ‡ation. We …nd that money matters when the variance of the supply of lending dominates productivity and the velocity of money demand. This is because amplifying the role of loans supply leads to an expansion in aggregate demand, via a compression of the external …nance premium, which is in ‡ationary. We consider a number of alternative monetary policy rules, and …nd that a rule which exploits the joint information from money and the external …nance premium performs best.JEL Classi…cation: E31; E40; E51.

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Maintaining low inflation: Money, interest rates, and policy stance

Cited by 69 publications

References 24 publications

Inflation Prediction and Inflation Volatility for Turkey

Inflation Prediction and Inflation Volatility for Turkey

The ECB’s Monetary Analysis Revisited

A Note on Money and the Conduct of Monetary Policy

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