Topic
Forward guidance
About: Forward guidance is a research topic. Over the lifetime, 3864 publications have been published within this topic receiving 126638 citations.
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TL;DR: In this article, the authors examine how recent econometric policy evaluation research on monetary policy rules can be applied in a practical policymaking environment, and the discussion centers around a hypothetical but representative policy rule much like that advocated in recent research.
8,414 citations
01 Jan 1995
TL;DR: There is wide agreement about the major goals of economic policy: high employment, stable prices, and rapid growth as discussed by the authors.There is less agreement that these goals are mutually compatible or, among those who regard them as incompatible, about the terms at which they can and should be substituted for one another.
Abstract: There is wide agreement about the major goals of economic policy: high employment, stable prices, and rapid growth. There is less agreement that these goals are mutually compatible or, among those who regard them as incompatible, about the terms at which they can and should be substituted for one another. There is least agreement about the role that various instruments of policy can and should play in achieving the several goals.
5,289 citations
Posted Content•
TL;DR: The authors showed that the interest rate on the Federal Funds is extremely informative about future movements of real macroeconomic variables, more so than monetary aggregates or other interest rates, and argued that the reason for this forecasting is that the funds rate sensitively records shocks to the supply of (not the demand for) bank reserves.
Abstract: First, we show that the interest rate on Federal funds is extremely informative about future movements of real macroeconomic variables, more so than monetary aggregates or other interest rates. Next, we argue that the reason for this forecasting is that the funds rate sensitively records shocks to the supply of (not the demand for) bank reserves, i.e. the funds rate is a good indicator of monetary policy actions. Finally, using innovations to the fuels rate as a measure of changes in monetary policy, we present evidence consistent with the view that monetary policy works at least in part through "credit" (that is, bank loans) as well as through "money" (that is, bank deposits) - even though bank loans fail to Granger-cause real variables.
3,027 citations
TL;DR: The authors found that the impact of monetary policy on lending is stronger for banks with less liquid balance sheets, i.e., banks with lower ratios of securities to assets, and that this pattern is largely attributable to the smaller banks, those in the bottom 95 percent of the size distribution.
Abstract: We study the monetary-transmission mechanism with a data set that includes quarterly observations of every insured U.S. commercial bank from 1976 to 1993. We find that the impact of monetary policy on lending is stronger for banks with less liquid balance sheets--i.e., banks with lower ratios of securities to assets. Moreover, this pattern is largely attributable to the smaller banks, those in the bottom 95 percent of the size distribution. Our results support the existence of a "bank lending channel" of monetary transmission, though they do not allow us to make precise statements about its quantitative importance.
2,416 citations
Book•
13 Nov 1992
TL;DR: In this paper, the authors discuss monetary policy with private information under perfect information and asymmetric information and changing objectives under discretion, and provide an overview of the employment and revenue motivations for monetary expansion.
Abstract: Part 1 Motives for monetary expansion under perfect information: overview the employment motive for monetary expansion the revenue motive for monetary expansion the mercantile or balance-of-payments motive for monetary expansion comparison of policy outcomes under a system of adjustable pegs with outcomes under a commonly managed currency system and its consequences for European monetary unification the financial stability motive, interest rate smoothing, and the theory of optimal seigniorage. Part 2 Asymmetric information and changing objectives under discretion: overview of models of monetary policy with private information the employment motive in the presence of a minimal information advantage about objectives an extended information advantage about central bank objectives alternative notions of credibility and reputation the politically optimal level of ambiguity. Part 3 Velocity shocks, politics, signalling, inflation persistence, and accommodation: private information about money demand and credibility partial disclosure of policy and its effect on policy outcomes why does inflation persist? - theories of monetary accommodation and of inflation cyclicality under discretion signalling and private information about the ability to commit and about objectives with time-invariant types political parties and monetary policy. Part 4 Central bank independence and policy outcomes - theory and evidence: aspects of central bank independence and their impact on policy outcomes and the distribution of inflation the measurement of central bank independence inflation and central bank independence ranking of central banks by an overall index of inflation-based central bank independence the mean and the variance of inflation, central bank credit, and central bank independence the determinants of central bank independence.
1,702 citations