Work

The Role of Countercyclical Monetary Policy

Year: 1996

Type: article

Abstract: When firms set nominal prices in advance, optimal monetary policy insulates aggregate output against shocks to demand. It can do so, however, by following the constant money growth rule advocated by Milton Friedman; it need not respond to the shocks in an actively countercyclical way. In addition, to the extent that output fluctuations are driven by shocks to supply, money growth should be procyclical.

Source: Journal of Political Economy

DOI: 10.1086/262039

Author: Peter N. Ireland

Language: English

Topic: Monetary Policy and Economic Impact

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2047867296

FWCI: 12.4

Cites: 2

Cited by: 153

Related to: 10