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The importance of systematic monetary policy for economic activity

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Author Info
Michael Dotsey
Abstract

How the Federal Reserve reacts to economic activity has significant implications for the way the economy behaves. Yet the importance of these responses has received limited attention in the economic literature. Much of the literature devoted to the economic effects of monetary policy concentrates on the impact of random monetary policy shocks. By contrast, the author analyzes the economic consequences of the systematic behavior of the monetary authority.

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Publisher Info
Article provided by Federal Reserve Bank of Richmond in its journal Economic Quarterly.

Volume (Year): (1999)
Issue (Month): Sum ()
Pages: 41-60
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Handle: RePEc:fip:fedreq:y:1999:i:sum:p:41-60

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Keywords: Monetary policy Interest rates

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Lawrence J. Christiano & Christopher J. Gust, 1999. "Taylor Rules in a Limited Participation Model," NBER Working Papers 7017, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  2. Basu, Susanto & Fernald, John G, 1997. "Returns to Scale in U.S. Production: Estimates and Implications," Journal of Political Economy, University of Chicago Press, vol. 105(2), pages 249-83, April.
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  3. Bennett T. McCallum, 1999. "Analysis of the Monetary Transmission Mechanism: Methodological Issues," NBER Working Papers 7395, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Glenn D. Rudebusch & Lars E. O. Svensson, 1998. "Policy rules for inflation targeting," Proceedings, Federal Reserve Bank of San Francisco, issue Mar.
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  5. L.J. Christiano & C.J. Gust, 1999. "Taylor Rules in a Limited Participation Model," DNB Staff Reports (discontinued) 33, Netherlands Central Bank. [Downloadable!]
  6. Susanto Basu & Miles S. Kimball, 1997. "Cyclical Productivity with Unobserved Input Variation," NBER Working Papers 5915, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Marvin Goodfriend & Robert G. King, 1998. "The new neoclassical synthesis and the role of monetary policy," Working Paper 98-05, Federal Reserve Bank of Richmond. [Downloadable!]
  8. V. V. Chari & Patrick J. Kehoe & Ellen R. McGrattan, 1998. "Sticky price models of the business cycle: can the contract multiplier solve the persistence problem?," Staff Report 217, Federal Reserve Bank of Minneapolis. [Downloadable!]
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  9. Nicoletta Batini & Andrew G Haldane, . "Forward-looking rules for monetary policy," Bank of England working papers 91, Bank of England. [Downloadable!]
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  10. Dotsey, Michael & King, Robert G, 1986. "Informational Implications of Interest Rate Rules," American Economic Review, American Economic Association, vol. 76(1), pages 33-42, March. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Chahnez Boudaya, 2005. "The effects of technological innovations on employment : a new explanation," Cahiers de la Maison des Sciences Economiques v05013, Université Panthéon-Sorbonne (Paris 1). [Downloadable!]
  2. Michael Dotsey & Robert G. King, 2001. "Pricing, Production and Persistence," NBER Working Papers 8407, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. William T. Gavin & Benjamin D. Keen & Michael R. Pakko, 2005. "The monetary instrument matters," Working Papers 2004-026, Federal Reserve Bank of St. Louis. [Downloadable!]
    Other versions:
  4. Michael Dotsey, 1999. "Structure from shocks," Working Paper 99-06, Federal Reserve Bank of Richmond. [Downloadable!]
  5. Michael Dotsey, 2002. "Structure from shocks," Economic Quarterly, Federal Reserve Bank of Richmond, issue Fall, pages 37-47. [Downloadable!]
  6. Kevin X. D. Huang, 2005. "Specific factors meet intermediate inputs: implications for strategic complementarities and persistence," Working Papers 04-7, Federal Reserve Bank of Philadelphia. [Downloadable!]
  7. Luca Bindelli, 2005. "Systematic monetary policy and persistence," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 05.07, Université de Lausanne, Faculté des HEC, DEEP. [Downloadable!]
  8. Elmar Mertens, 2005. "Puzzling Comovements between Output and Interest Rates? Multiple Shocks are the Answer," Working Papers 05.05, Swiss National Bank, Study Center Gerzensee. [Downloadable!]
  9. Andreas Hornstein & Michael Dotsey, 2002. "Should optimal discretionary monetary policy look at money?," Working Paper 02-04, Federal Reserve Bank of Richmond. [Downloadable!]
  10. Bennett T. McCallum, 1999. "Analysis of the Monetary Transmission Mechanism: Methodological Issues," NBER Working Papers 7395, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  11. Luca Dedola & Stefano Neri, 2006. "What does a technology shock do? A VAR analysis with model-based sign restrictions," Working Paper Series 705, European Central Bank. [Downloadable!]
    Other versions:
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