Money Still Makes the World Go Round: The Zonal View
AbstractMany monetary economists have come to regard the monetary aggregates as obsolete measures of the monetary policy stance. This critique has led some to view money as having lost its central role in the conduct of monetary policy. We say to those advocating excising money from monetary policy, "Not so fast." To better understand the potential role for money, we develop a zonal view of monetary policy which reflects the historical regularity for the relative informativeness of the quantitative measures of monetary policy, such as the monetary aggregates, and real interest rates to depend on the inflation zone in which a central bank finds itself. The zones range from high inflation (zone 1) to deep deflation (zone 5), with intermediate zones of moderate inflation (zone 2), low inflation (zone 3), and low deflation (zone 4). (JEL: E5, E4, N1) (c) 2007 by the European Economic Association.
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Bibliographic InfoArticle provided by MIT Press in its journal Journal of the European Economic Association.
Volume (Year): 5 (2007)
Issue (Month): 2-3 (04-05)
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Web page: http://www.mitpressjournals.org/jeea
Find related papers by JEL classification:
- E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
- E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
- N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations
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- Assenmacher-Wesche, Katrin & Gerlach, Stefan & Sekine, Toshitaka, 2008.
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- Assenmacher-Wesche, Katrin & Gerlach, Stefan & Sekine, Toshitaka, 2008. "Monetary factors and inflation in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 22(3), pages 343-363, September.
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