Martin, Antoine; Monnet, Cyril (2011). Monetary policy implementation framework: A comparative analysis. Macroeconomic dynamics, 15(Suppl 1), pp. 145-189. Cambridge: Cambridge University Press 10.1017/S1365100510000660
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We compare two stylized frameworks for the implementation of monetary policy. The first framework relies only on standing facilities, whereas the second framework relies only on open-market operations. We show that the Friedman rule cannot be implemented when the central bank uses standing facilities only. For a given rate of inflation, we show that standing facilities unambiguously achieve higher welfare than just conducting open-market operations. We conclude that elements of both frameworks should be combined. Also, our results suggest that any monetary policy implementation framework should remunerate both required and excess reserves.
Item Type: |
Journal Article (Original Article) |
|---|---|
Division/Institute: |
03 Faculty of Business, Economics and Social Sciences > Department of Economics |
UniBE Contributor: |
Monnet, Cyril |
ISSN: |
1365-1005 |
Publisher: |
Cambridge University Press |
Language: |
English |
Submitter: |
Factscience Import |
Date Deposited: |
04 Oct 2013 14:26 |
Last Modified: |
05 Dec 2022 14:08 |
Publisher DOI: |
10.1017/S1365100510000660 |
Web of Science ID: |
000289847400007 |
BORIS DOI: |
10.48350/9516 |
URI: |
https://boris.unibe.ch/id/eprint/9516 (FactScience: 215265) |
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