Implementing the Friedman Rule
AbstractIn cash-in-advence models, ncessary and sufficient conditions for the existence of an equilibrium with zero nominal interest rates and Pareto optimal allocations place restrictions only on the very long-run, or asymptotic, behavior of the money supply. When these asymptotic conditions are satisfied, they leave the central bank with a great deal of flexibility to manage the money supply over any finite horizon. But what happens when these asymptotic conditions fail to hold? This paper shows that the central bank can still implement the Friedman rule if its actions are appropriately constrained in the short run. (Copyright: Elsevier)
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Volume (Year): 6 (2003)
Issue (Month): 1 (January)
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Other versions of this item:
- Peter N. Ireland, 2000. "Implementing the Friedman Rule," Boston College Working Papers in Economics 460, Boston College Department of Economics.
- Peter N. Ireland, 2002. "Implementing the Friedman Rule," NBER Working Papers 8821, National Bureau of Economic Research, Inc.
- Peter N. Ireland, 2000. "Implementing the Friedman rule," Working Paper 0012, Federal Reserve Bank of Cleveland.
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
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