Interest and Prices: Foundations of a Theory of Monetary PolicyWith the collapse of the Bretton Woods system, any pretense of a connection of the world's currencies to any real commodity has been abandoned. Yet since the 1980s, most central banks have abandoned money-growth targets as practical guidelines for monetary policy as well. How then can pure "fiat" currencies be managed so as to create confidence in the stability of national units of account? |
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... Dynamics with Staggered Pricesetting 2.1 The Calvo Model of Pricesetting 177 2.2 A New Keynesian Phillips Curve 187 2.3 Persistent Real Effects of Nominal Disturbances 188 2.4 Consequences of Persistence in the Growth of 2.5 ...
... Dynamics 261 Determinants of Inflation 276 Inflation Stabilization through Commitment to a Taylor Rule 286 Inflation Targeting Rules 290 3 Money and Aggregate Demand 3.1 3.2 An Optimizing IS-LM Model 295 Real-Balance Effects 299 4 ...
... dynamics in a properly specified Phillips-curve relation, as I show in Chapter 3. It is also this concept of the output gap to which interest rates should respond if a “Taylor rule” is to be a successful approach to inflation ...
... dynamic version of such a synthesis, the neoclassical theory (i.e., RBC theory) defines not a static “long-run ... dynamics. At the same time, the stickiness of prices and/or wages implies that short- run output determination can ...
... dynamics of the form33 - it = ( 1 − p1 ) īt + Piùt - 1 + p2 ( it – 1 — it – 2 ) . ( 4.5 ) dynamics implying substantial persistence . They give a similar characteriza-. The desired level of the funds rate in turn depends upon inflation ...
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Interest and Prices: Foundations of a Theory of Monetary Policy Michael Woodford No preview available - 2003 |