Work

Monetarism Rides Again? US Monetary Policy in a World of Quantitative Easing

Year: 2014

Type: book

Abstract: In a model of banking we give money a role in providing cheap collateral; i.e. besides the Taylor Rule, monetary policy can affect the risk-premium by varying the supply of M0 in open market operations, so that even at the zero bound monetary policy is still effective, and fiscal policy still crowds out investment. A simple rule for making M0 respond to credit conditions can substantially enhance the economy’s stability. This, in combination with Price-level or nominal GDP targeting rules for interest rates, stabilises the economy further, making aggressive and distortionary regulation of banks’ balance sheets redundant.

Source: ORCA Online Research @Cardiff (Cardiff University)

Authors: Vo Phuong Mai Le, David Meenagh, Patrick Minford

Institutions: Cardiff University, Centre for Economic Policy Research

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: W3122095688

FWCI:

Cites: 4

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Related to: 10