Work

The Optimal Design of Interest Rate Target Changes

Year: 2004

Type: article

Abstract: This paper derives the optimal size and timing of interest rate target changes. Despite the simplicity of the optimal rule, we are able to replicate a number of puzzling features of interest rate targeting observe in practice, as well as explain some dynamic properties of market interest rates. Extensions to deal with monetary policy cycles, anticipated and unanticipated target changes, and the effect of FOMC meeting dates are discussed.

Source: Journal of money credit and banking

DOI: 10.1353/mcb.2004.0004

Authors: Graeme A. (Graeme Alexander) Guthrie, Julian Wright

Institutions: Victoria University of Wellington, University of Auckland

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: W2137705698

FWCI: 2.02

Cites: 26

Cited by: 20

Related to: 10