The microstructure of the euro money market

Hartmann, Philipp; Manna, Michele; Manzanares, Andrés

doi:10.1016/s0261-5606(01)00029-8

Cited by 113 publications

(80 citation statements)

References 28 publications

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“…And as before, the di¤erence between the deposit and the lending rates explain why the CB can achieve the allocation q s . If we now combine (11) and (12), we obtain that even if OMOs take place once the shocks are realized, it is better to use the channel system than OMOs, given a level of in ‡ation that is implementable using both systems. Therefore, the result in the main body of the paper is robust to a change in the timing of OMOs.…”

Section: Standing Facilitiesmentioning

confidence: 99%

Monetary Policy Implementation Frameworks: A Comparative Analysis

Martin

Monnet

2010

Macroecon. Dynam.

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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. Terms of use: Documents in AbstractWe compare two stylized frameworks for the implementation of monetary policy. The first framework relies only on standing facilities, and the second one relies only on open market operations. We show that the Friedman rule cannot be implemented in the first framework, but can be implemented using the second framework. However, for a given rate of inflation, we show that the first framework unambiguously achieves higher welfare than the second one. We conclude that an optimal system of monetary policy implementation should contain elements of both frameworks. Our results also suggest that any such system should pay interest on both required and excess reserves.

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Section: Standing Facilitiesmentioning

confidence: 99%

Monetary Policy Implementation Frameworks: A Comparative Analysis

Martin

Monnet

2010

Macroecon. Dynam.

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“…Jansen and de Haan 2005 for an overview, Jansen and de Haan 2007), and, more generally, on financial markets and the predictability of monetary policy decisions (Bernoth and von Hagen 2004, Gaspar et al 2001, Hartmann et al 2001. Ross (2002) concludes that the Fed and the Bank of England are more predictable than the ECB whereas Connolly and Kohler (2004) come to the conclusion that the predictability of monetary policy of the Fed, the Bank of England, and the ECB is similar.…”

Section: Motivationmentioning

confidence: 99%

Inflation expectations of experts and ECB communication

Ullrich

2008

The North American Journal of Economics and Finance

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp07054.pdf Non-technical SummaryThe JEL Classification: E52, E58, D83, D84

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“…If ε = 0, the signal contains no information and so agents have no gains from trading in the money market. 10 Consequently, no trade occurs in the money market. If ε = 1, there is no uncertainty about the liquidity shock in the goods market.…”

Section: Introductionmentioning

confidence: 99%

“…General goods are produced solely from inputs of labor according to a constant return to scale production technology where one unit of the consumption good is produced with one 10 Here, we already take into account that in equilibrium all agents leave the settlement stage with the same amounts of money and bonds (see the analysis in Section 3.1). Consequently, in equilibrium all agents are identical at the beginning of the money market.…”

Section: Introductionmentioning

confidence: 99%

Monetary policy in a channel system

Berentsen

Monnet

2008

Journal of Monetary Economics

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Channel systems for conducting monetary policy are becoming increasingly popular. Despite their popularity, the consequences of implementing policy with a channel system are not well understood. We develop a general equilibrium framework of a channel system and investigate the optimal policy. A novel aspect of the channel system is that a central bank can "tighten" or "loosen" its policy without changing its target rate by increasing the interest-rate spread symmetrically around the target rate. This questions the characterization of optimal policy through interest-rate rules, as done in a large body of the literature on the optimal design of interest-rate rules.JEL: E40, E50, D83

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The microstructure of the euro money market

Abstract: Reproduction for educational and non-commercial purposes is permitted provided that the source is acknowledged.

Cited by 113 publications

References 28 publications

Monetary Policy Implementation Frameworks: A Comparative Analysis

Monetary Policy Implementation Frameworks: A Comparative Analysis

Inflation expectations of experts and ECB communication

Monetary policy in a channel system

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