全球智库信息集成服务系统(G2TT): DP14865 The Role of Money in Monetary Policy at the Lower Bound

G2TT

来源类型	Discussion paper
规范类型	论文
来源ID	DP14865
	DP14865 The Role of Money in Monetary Policy at the Lower Bound
	Roberto M Billi; Ulf Söderström; Carl Walsh
发表日期	2020-06-10
出版年	2020
语种	英语
摘要	In light of the current low-interest-rate environment, we reconsider the merit of a money growth target (MGT) relative to a conventional inflation targeting (IT) regime, and to the notion of price level targeting (PLT). Through the lens of a New Keynesian model, and accounting for a zero lower bound (ZLB) constraint on the nominal interest rate, we show, not surprisingly, that PLT performs best in terms of social welfare. However, the ranking between IT and MGT is not a foregone conclusion. In particular, although MGT makes monetary policy vulnerable to money demand shocks, it contributes to achieving price level stability and reduces the incidence and severity of the ZLB relative to both IT and PLT. We also show that MGT lessens the need for the fiscal authority to engage alongside the central bank in fighting recessions. To illustrate this fiscal benefit of MGT, we introduce a simple rule for the fiscal authority to raise government purchases when GDP falls below potential. If the government fails to make up for a substantial share of the shortfalls in GDP, then IT performs worse than MGT from the perspective of society.
主题	Monetary Economics and Fluctuations
关键词	Friedman's k-percent rule Zlb constraint Fiscal policy Automatic stabilizers
URL	https://cepr.org/publications/dp14865
来源智库	Centre for Economic Policy Research (United Kingdom)
资源类型	智库出版物
条目标识符	http://119.78.100.153/handle/2XGU8XDN/543804
推荐引用方式 GB/T 7714	Roberto M Billi,Ulf Söderström,Carl Walsh. DP14865 The Role of Money in Monetary Policy at the Lower Bound. 2020.