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New Economy, Old Central Banks?

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  • Jan Marc Berk

    ()
    (Monetary and Economic Policy Department, De Nederlandsche Bank, and Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam)

Abstract

Proponents of the so-called New Economy claim that it entails a structural change of the economy. Such a change, in turn, would require the central bank to rethink its monetary policy to the extent that traditional relationships between inf1ation and economic growth are no longer valid. But such a rethinking presupposes that prospective advances in information technology and other factors associated with the new economy do not threaten the capacity of central banks to stabilise the general level of prices. It is the aim of this paper to shed some light on the latter, by analysing the monetary transmission mechanism in a 'new economy' environment. We argue that, although the form of central bank instruments and current methods for implementing monetary policy may change, the goals that the policy makers try to achieve by employing these instruments remain valid, and achievable.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 02-087/2.

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Date of creation: 04 Sep 2002
Date of revision: 01 Aug 2002
Handle: RePEc:dgr:uvatin:20020087

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Keywords: Electronic money; New Economy; Monetary policy;

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Cited by:
  1. Haydar, Akyazi & Seyfettin, Artan, 2006. "The reflections of new economy on monetary policy and central banking," MPRA Paper 603, University Library of Munich, Germany, revised 27 Sep 2006.

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