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Monetary policy

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Full-Text Articles in Economics

Special Remarks At The Seminar On: "Financial Sector Developments: Challenges For Risk Based Supervision And Effective Monetary Policy Implementation, C. N. Mordi O. Dec 2008

Special Remarks At The Seminar On: "Financial Sector Developments: Challenges For Risk Based Supervision And Effective Monetary Policy Implementation, C. N. Mordi O.

Economic and Financial Review

This is the Special remarks.at the opening ceremony of the 16th edition of the annual in-house Executive Policy Seminar organized by the Research Department, in collaboration with the Human Resources Department. As usual, the seminar is aimed at availing the Executives of the Bank the opportunity of brainstorming on contemporary economic issues in the economy and the globe at large. In this respect, the theme of this year's Seminar "Financial Sector Development: Challenges for Risk-Based Supervision and Effectiveness of Monetary Policy Implementation" could not have come at a more opportune time, given the current financial meltdown ravaging global markets. This …

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Global Financial Meltdown: Genesis, Consequences, And Lessons, Ishrat Husain Dr. Oct 2008

Global Financial Meltdown: Genesis, Consequences, And Lessons, Ishrat Husain Dr.

Faculty Research - Talks, Speeches, & Discourse

First of all let me thank ICAP for inviting me to this very important meeting. I feel that there is a lack of understanding of the global financial crisis, what its consequences are and more importantly what are the lessons. We all seem to believe in rhetoric, slogans and platitudes and one of the most popular platitudes these days is that ‘capitalism is dead’ and nationalization is the word which will prevail over the entire global finance. If we draw the wrong conclusions we are going to make even more mistakes and, therefore, it is important to put this in …

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Understanding Nominal Anchor: A Case Study Of Central Bank Of Nigeria, A. Bamidele Sep 2008

Understanding Nominal Anchor: A Case Study Of Central Bank Of Nigeria, A. Bamidele

Bullion

As a country's monetary authority, a central bank is responsible for the conduct of monetary policy. This onerous process begins with developing a plan of action of employing interest rates or controlling the money stock to influence the economy. The focus of monetary policy is to safeguard the value of the domestic currency in terms of what it can purchase as a basis of providing a framework for the achievement of wider government economic objectives of non-inflationary economic growth, employment, stable exchange rate, favourable balance of payments and more generally a stable financial environment for the economy. In view of …

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Optimal Rules Bagi Instrumen Kebijakan Moneter Di Indonesia: Pengujian Empiris Model Guender, Zenathan Adnin, Eugenia Mardanugraha Jul 2008

Optimal Rules Bagi Instrumen Kebijakan Moneter Di Indonesia: Pengujian Empiris Model Guender, Zenathan Adnin, Eugenia Mardanugraha

Jurnal Ekonomi dan Pembangunan Indonesia

This study aims to test model developed by Guender (2002) in determining optimal rules for monetary policy instrument in Indonesia. The test is conducted by estimating parameters of IS equation and Forward Looking Phillips Curve. The result expected is rules for determining the optimal interest rate which is influenced by the gap between actual and targeted inflation. The result shows that in the era of inflation targeting the interest rate setting policy as monetary policy instrument has focus on output stability rather than inflation stability. Finally, the study concludes that the interest rate targeting as BI rate has not being …

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East Asia And Global Imbalances: Saving, Investment, And Financial Development, Hiro Ito, Menzie David Chinn Feb 2008

East Asia And Global Imbalances: Saving, Investment, And Financial Development, Hiro Ito, Menzie David Chinn

Economics Faculty Publications and Presentations

We investigate the role of budget balances, financial development and openness, in the evolution of global imbalances. Financial development – or the lack thereof – has received considerable attention as a possible contributing factor to the development of persistent and expanding current account imbalances. Several observers have argued that the depth and sophistication of US capital markets have caused capital to flow from relatively underdeveloped East Asian financial markets. In this paper, we extend our previous work by examining the effect of different types and aspects of financial development. Our cross-country analysis, encompassing a sample of 19 industrialized countries and …

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Binary Economics And The Case For Broader Ownership, Robert Ashford Jan 2008

Binary Economics And The Case For Broader Ownership, Robert Ashford

College of Law - Faculty Scholarship

Binary economics simultaneously offers a paradigm for understanding economic efficiency, growth, and justice that is foundationally distinct from classical, neoclassical, Keynesian, and socialist economics. First proposed by Louis Kelso, binary economics also offers a prescription for establishing a more inclusive, competitive and democratic private property system, one that universalizes the right to acquire capital with the earnings of capital. Focusing on an important anomaly left unexplained or poorly explained classical, neoclassical, and Keynesian economics (i.e., the persistence of unutilized productive capacity in a context in which markets are supposedly becoming more efficient) and left unremedied by any approach yet applied, …

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2008-1 The Case For Price Stability, Then And Now: A Retrospective Note On John W. Crow's 1988 Eric J. Hanson Memorial Lecture, David Laidler Jan 2008

2008-1 The Case For Price Stability, Then And Now: A Retrospective Note On John W. Crow's 1988 Eric J. Hanson Memorial Lecture, David Laidler

Economic Policy Research Institute. EPRI Working Papers

No abstract provided.

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Central Bank Of Nigeria Annual Report And Statement Of Accounts For The Year Ended 31st December 2007, Central Bank Of Nigeria Dec 2007

Central Bank Of Nigeria Annual Report And Statement Of Accounts For The Year Ended 31st December 2007, Central Bank Of Nigeria

CBN Annual Report

In 2007, the Central Bank of Nigeria (CBN) faced significant challenges in monetary management due to statutory allocations to government tiers, autonomous foreign exchange inflows, and pre-election spending. These challenges were addressed through Open Market Operations (OMO), issuance of treasury securities, standing facilities, and foreign exchange swaps. The introduction of the monetary policy rate (MPR) in December 2006 moderated inter-bank rates, encouraged trading, and improved the transmission of monetary policy actions. The Bank intensified its non-regular management activities to ensure the Policy Support Instrument (PSI) target was met. The financial system at end-2007 comprised the CBN, the Nigeria Deposit Insurance …

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Keynote Address By S. O. Alade, Sarah O. Alade Dec 2007

Keynote Address By S. O. Alade, Sarah O. Alade

Economic and Financial Review

Keynote Address by Dr Sarah Alade, the Deputy Governor (Economic Policy), Central Bank of Nigeria at the CBN Executive seminar on monetary policy in a changing environment for CBN Executive Staff.

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Welcome Address, C. E. Nkwonta Dec 2007

Welcome Address, C. E. Nkwonta

Economic and Financial Review

This is the welcome address for the seminar on "Monetary Policy in a Changing Environment" for CBN Executive Staff.

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Understanding Recent Trends In House Prices And Home Ownership, Robert J. Shiller Sep 2007

Understanding Recent Trends In House Prices And Home Ownership, Robert J. Shiller

Cowles Foundation Discussion Papers

This paper looks at a broad array of evidence concerning the recent boom in home prices, and considers what this means for future home prices and the economy. It does not appear possible to explain the boom in terms of fundamentals such as rents or construction costs. A psychological theory, that represents the boom as taking place because of a feedback mechanism or social epidemic that encourages a view of housing as an important investment opportunity, fits the evidence better. Three case studies of past booms are considered for comparison: the US housing boom of 1950, the US farmland boom …

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The Industry Effects Of Monetary Policy In The Euro Area By Gert Peersman And Frank Smets: A Review, Ade O. Adenuga Jun 2007

The Industry Effects Of Monetary Policy In The Euro Area By Gert Peersman And Frank Smets: A Review, Ade O. Adenuga

Economic and Financial Review

The article sheds some light on the question of whether monetary policy has stronger effects on economic activity in recessions than in expansions. It analyzed which industries are relatively more affected in downturns. The estimation was done by examining eleven manufacturing industries in seven countries of the euro area. The article is related to the works of Garcia and Schaller,1995; Kakes, 1998; Dolado and Maria-Dolores, 1999; and Peersman and Smets, 2001.

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Global Current Account Imbalances: American Fiscal Policy Versus East Asian Savings, Menzie David Chinn, Hiro Ito Feb 2007

Global Current Account Imbalances: American Fiscal Policy Versus East Asian Savings, Menzie David Chinn, Hiro Ito

Economics Faculty Publications and Presentations

We consider the origins of global current account imbalances. We first discuss how the expansion of the US current account deficit and the decrease in global real interest rates can be reconciled with the widespread view that American expansionary fiscal policy is partly the source of current trends. We then investigate empirically the medium-term determinants of the current account using a model that controls for factors related to institutional development. In addition to the conventional macroeconomic factors, we examine a series of environmental factors, including the degree of financial openness and the extent of legal development. We find that for …

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2007-2 Successes And Failures Of Monetary Policy Since The 1950s, David Laidler Jan 2007

2007-2 Successes And Failures Of Monetary Policy Since The 1950s, David Laidler

Economic Policy Research Institute. EPRI Working Papers

No abstract provided.

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Central Bank Of Nigeria Annual Report And Statement Of Accounts For The Year Ended 31st December 2006, Central Bank Of Nigeria Dec 2006

Central Bank Of Nigeria Annual Report And Statement Of Accounts For The Year Ended 31st December 2006, Central Bank Of Nigeria

CBN Annual Report

This Report reviews the operations of the Central Bank of Nigeria (CBN) and macroeconomic developments during the fiscal year 2006 and appraises the major economic policy outcomes during the period. The Bank reported a stable foreign exchange market in 2006, with an average effective official exchange rate of N 128.65 per U.S dollar, an increase of 2.6% over 2005. The stock of external reserves, valued at US$12.30 billion, was 49.6% higher than in 2005, driven by high crude oil prices and lower debt-service burden. The reserves were equivalent to 28.4 months of import cover, exceeding the 6 months requirement under …

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Implications Of Erm2 For Poland's Monetary Policy, Lucjan Orlowski, Krzysztof Rybinski Dec 2006

Implications Of Erm2 For Poland's Monetary Policy, Lucjan Orlowski, Krzysztof Rybinski

WCBT Faculty Publications

We propose an extension to the inflation targeting regime currently pursued by Poland. It incorporates the exchange rate stability constraints as imposed by the obligatory participation in the ERM2 that Poland needs to satisfy prior to adopting the euro. The modified policy is based on the forward-looking inflation targeting supplemented with the exchange rate stability objective. Its effective implementation depends on the determined long-term equilibrium exchange rate and the observed degree of exchange rate volatility. Both are empirically estimated by employing the Johansen cointegration tests and the threshold generalized autoregressive heteroscedasticity model with the in-mean extension and generalized error distribution …

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Current Account Balances, Financial Development And Institutions: Assaying The World “Saving Glut”, Menzie David Chinn, Hiro Ito Dec 2006

Current Account Balances, Financial Development And Institutions: Assaying The World “Saving Glut”, Menzie David Chinn, Hiro Ito

Economics Faculty Publications and Presentations

We critically assess several of the key assertions underlying the global saving glut hypothesis. First, we investigate whether the behavior of the U.S. current account behavior is anomalous in light of previous industrial country experience. Second, we determine whether East Asian current account balances are predictable using standard macroeconomic variables, augmented with institutional factors. Finally, we investigate whether higher levels of financial development in key East Asian economies would result in smaller current account surpluses. We find that a one percentage-point increase in the budget balance would increase the current account balance by 0.10 to 0.49 percentage-points for industrialized countries, …

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2006-4 Monetary Cooperation In The North American Economy, David Laidler Jan 2006

2006-4 Monetary Cooperation In The North American Economy, David Laidler

Economic Policy Research Institute. EPRI Working Papers

No abstract provided.

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Real Interest Rates And Inflation In Norway, David E. Allen, Tinashe Mapfumba Jan 2006

Real Interest Rates And Inflation In Norway, David E. Allen, Tinashe Mapfumba

Research outputs pre 2011

We analyse the effectiveness of the monetary stance adopted by the Norwegian central bank in implementing monetary policy assessing how it relates to the neutral rate of interest. The neutral rate is frequently defined as the level of real interest rate consistent with both stable inflation and a level of production equal to potential production; providing no stimulus or restraint to the economy. We attempt to calculate this rate and to examine the long run link between real interest rates and inflation in Norway. We apply cointegration analysis to explore whether the gap between the real and neutral rate of …

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On Some Subtle Implications Of The Choice Of Numeraire For Monetary Policy In Developing Countries, Eduardo Zambrano Dec 2005

On Some Subtle Implications Of The Choice Of Numeraire For Monetary Policy In Developing Countries, Eduardo Zambrano

Economics

Numeraire choice is often deemed a problem of purely analytical convenience. In this paper I show that there is more to numeraire selection than meets the eye for the formulation of monetary policy in countries with weak fiscal institutions. I show how (a) improper numeraire choice can dramatically overstate or understate Central Bank profits and (b) how this can threaten the ability of a Central Bank to keep inflation under control. I show point (a) in the context of Monte Carlo experiments calibrated for the Venezuelan economy and point (b) in an infinitely lived representative agent model that illustrates the …

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Monetary-Cum-Exchange Rate Regime: What Works Best For Emerging Market Economies?, Ishrat Husain Dr. Nov 2005

Monetary-Cum-Exchange Rate Regime: What Works Best For Emerging Market Economies?, Ishrat Husain Dr.

Faculty Research - Talks, Speeches, & Discourse

Conduct of monetary policy in emerging market economies is certainly no less challenging than it is in advance economies; it may be argued that it is, in fact, more challenging because of different nature of economic, socio-political and institutional structure of emerging market economies. However, the experience of advance economies in formulating and implementing monetary policy combined with the broad principles of economics and their own experiences provides a natural starting point for the central banks of emerging economies to actively search for improving their monetary regimes.

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Discussion: Narrow Money, Broad Money, And The Transmission Of Monetary Policy, Gregory Hess Jan 2005

Discussion: Narrow Money, Broad Money, And The Transmission Of Monetary Policy, Gregory Hess

CMC Faculty Publications and Research

Monetary policy and theory have been greatly transformed since Dale Henderson, Richard Porter, and Peter Tinsley (HPT) first crossed the Board's threshold more than thirty years ago. Judging from the sustained levels of robust growth and moderate rates of inflation in the United States since the early 1980s, both theory and policy have moved in a welfare-improving direction. The dramatic evolution of monetary policy during HPT's tenure simply cannot be overstated. A revolution took place during their watch, and as the custodians and facilitators of research at the Federal Reserve Board, these three amigos should certainly take some credit.

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2005-11 Milton Friedman And The Evolution Of Macroeconomics, David Laidler Jan 2005

2005-11 Milton Friedman And The Evolution Of Macroeconomics, David Laidler

Economic Policy Research Institute. EPRI Working Papers

No abstract provided.

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Policy Effects In The Post Boom U.S. Economy, Ray C. Fair Jan 2005

Policy Effects In The Post Boom U.S. Economy, Ray C. Fair

Cowles Foundation Discussion Papers

The paper analyzes the question why the U.S. economy in the 2000:4-2004:3 period was sluggish in light of the large expansionary fiscal and monetary policies that took place. The answer does not appear to be that there were large structural changes in the economy or systematic bad shocks. This paper tests for such changes and shocks, and the results are generally negative. Instead, the main culprits seem to be large negative effects from declines in the stock market and exports. Although not tested in this paper, some of the decline in exports may be the result of the stock market …

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Feasibility And Timing Of The Euro Adoption By The New Eu Member States, Lucjan Orlowski Jan 2005

Feasibility And Timing Of The Euro Adoption By The New Eu Member States, Lucjan Orlowski

WCBT Faculty Publications

The 10 new member states are now facing the challenge of framing and implementing policies for adopting the euro. They are all bound by the EU Treaty to replace their national currencies with the euro at some future time as they were admitted to the Union with a derogation to this effect. In order to prepare adequately for entry to the euro area, the candidates need to undergo fiscal and monetary convergence. In principle, they should refrain from lax fiscal policies that could skew the eurozone policy mix by forcing the European Central Bank (ECB) to tighten monetary policy. They …

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A Var Analysis Of Singapore's Monetary Transmission Mechanism, Hwee Kwan Chow Sep 2004

A Var Analysis Of Singapore's Monetary Transmission Mechanism, Hwee Kwan Chow

Research Collection School Of Economics

The Singapore economy has experienced greater business cycle fluctuations in recent years, being subject to recurrent shocks from the external environment. Given the extreme openness of the economy—Singapore’s export share of GDP is approximately 180%—it is not surprising that the main cause of the increase in economic volatility is a rise in the frequency and magnitude of exogenous shocks. These include the downswing in the global electronics industry in 1996–97, the Asian financial crisis in 1997–98, the burst of the information technology bubble in 2001, and the outbreak of the SARS respiratory disease in 2003. Such a close sequence of …

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Output Gap Uncertainty And Monetary Policy During The 1970s, David E. Spencer Feb 2004

Output Gap Uncertainty And Monetary Policy During The 1970s, David E. Spencer

Faculty Publications

The conduct of monetary policy during the 1970s was greatly complicated by systematic real-time misperceptions of the state of economic activity as measured by the output gap. Employing real-time data and using the Taylor rule as an analytical framework, I explore the implications of utilizing alternative observable proxies for the unobservable output gap. I compare the counterfactual paths for the federal funds rate generated under each proxy with the actual path of the federal funds rate and a benchmark ("ideal") path implied by a full information Taylor rule. Results suggest that these real-time proxies would have resulted in better policy …

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2004-8 Central Banks As Lenders Of Last Resort - Trendy Or Passé?, David Laidler Jan 2004

2004-8 Central Banks As Lenders Of Last Resort - Trendy Or Passé?, David Laidler

Economic Policy Research Institute. EPRI Working Papers

No abstract provided.

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Political Barriers And The Transmission Of Monetary Policy Across States: The New England Antebellum Banking Market, Andrew J. Economopoulos Oct 2003

Political Barriers And The Transmission Of Monetary Policy Across States: The New England Antebellum Banking Market, Andrew J. Economopoulos

Business and Economics Faculty Publications

The New England antebellum banking market was examined to understand the interaction of political ideology and economic forces. With each state controlling bank entry, hence the money supply, political ideology could impede the supply of money within a state. However, the monetary forces from neighboring states may have influenced the degree to which parties held true to their political ideology. The results indicate that political ideology was an effective barrier in two of the six states, while three states were responsive to neighbor states' monetary policy regardless of political ideology. These states responded by creating new banks, raising existing capital …

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Missing Aggregate Dynamics: On The Slow Convergence Of Lumpy Adjustment Models, Ricardo J. Caballero, Eduardo Engel Jul 2003

Missing Aggregate Dynamics: On The Slow Convergence Of Lumpy Adjustment Models, Ricardo J. Caballero, Eduardo Engel

Cowles Foundation Discussion Papers

The dynamic response of aggregate variables to shocks is one of the central concerns of applied macroeconomics. The main measurement procedure for these dynamics consists of estimating an ARMA or VAR (VARs, for short). In non- or semi-structural approaches, the characterization of dynamics stops there. In other, more structural approaches, researcher try to uncover underlying adjustment cost parameters from the estimated VARs. Yet, in others, such as in RBC models, these estimates are used as the benchmark over which the success of the calibration exercise, and the need for further theorizing, is assessed. The main point of this paper is …

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