Monetarism rides again? US monetary policy in a world of quantitative easing

Le, Vo Phuong Mai, Meenagh, David and Minford, Patrick 2016. Monetarism rides again? US monetary policy in a world of quantitative easing. Journal of International Financial Markets, Institutions and Money 44 , pp. 85-102. 10.1016/j.intfin.2016.04.011

Preview

PDF - Accepted Post-Print Version Available under License Creative Commons Attribution Non-commercial No Derivatives. Download (408kB) | Preview

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.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Advanced Research Computing @ Cardiff (ARCCA) Business (Including Economics)
Subjects:	H Social Sciences > HB Economic Theory
Publisher:	Elsevier
ISSN:	1042-4431
Date of First Compliant Deposit:	28 April 2016
Date of Acceptance:	27 April 2016
Last Modified:	09 Jul 2020 16:15
URI:	http://orca-mwe.cf.ac.uk/id/eprint/90099

Citation Data

Cited 4 times in Scopus. View in Scopus. Powered By Scopus® Data

Actions (repository staff only)

Edit Item