Informational Implications of Interest Rate Rules
This paper compares interest rate and money supply rules. The analysisis conducted within a rational expectations macro model that incorporates flexible prices and informational frictions. With differential information, interest rate targets can affect the information content of market prices and real activity, but these realconsequences can always be replicated by an appropriately chosen moneystock rule with feedback to economic activity. However, when the policyauthority lacks information about the state of the economic system, itfaces a discrete choice between an interest rate peg and strict moneystock control. Copyright 1986 by American Economic Association.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 76 (1986)
Issue (Month): 1 (March)
|Contact details of provider:|| Web page: https://www.aeaweb.org/aer/|
More information through EDIRC
|Order Information:||Web: https://www.aeaweb.org/subscribe.html|
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.:
- Lucas, Robert Jr., 1972. "Expectations and the neutrality of money," Journal of Economic Theory, Elsevier, vol. 4(2), pages 103-124, April.
- S. Grossman & L. Weiss, "undated".
"Heterogeneous Information and the Theory of the Business Cycle,"
Rodney L. White Center for Financial Research Working Papers
16-80, Wharton School Rodney L. White Center for Financial Research.
- Grossman, Sanford J & Weiss, Laurence, 1982. "Heterogeneous Information and the Theory of the Business Cycle," Journal of Political Economy, University of Chicago Press, vol. 90(4), pages 699-727, August.
- Sanford Grossman & Laurence Weiss, 1980. "Heterogeneous Information and the Theory of the Business Cycle," Cowles Foundation Discussion Papers 558, Cowles Foundation for Research in Economics, Yale University.
- Geoffrey Woglom, 1979. "Rational Expectations and Monetary Policy in a Simple Macroeconomic Model," The Quarterly Journal of Economics, Oxford University Press, vol. 93(1), pages 91-105.
- King, Robert G, 1982. "Monetary Policy and the Information Content of Prices," Journal of Political Economy, University of Chicago Press, vol. 90(2), pages 247-279, April.
- Dotsey, Michael & King, Robert G., 1983.
"Monetary instruments and policy rules in a rational expectations environment,"
Journal of Monetary Economics,
Elsevier, vol. 12(3), pages 357-382, September.
- Michael Dotsey & Robert G. King, 1983. "Monetary Instruments and Policy Rules in a Rational Expectations Environment," NBER Working Papers 1114, National Bureau of Economic Research, Inc.
- Hercowitz, Zvi, 1981.
"Money and the Dispersion of Relative Prices,"
Journal of Political Economy,
University of Chicago Press, vol. 89(2), pages 328-356, April.
- William Poole, 1970. "Optimal Choice of Monetary Policy Instruments in a Simple Stochastic Macro Model," The Quarterly Journal of Economics, Oxford University Press, vol. 84(2), pages 197-216.
- Weiss, Laurence M, 1980.
"The Role for Active Monetary Policy in a Rational Expectations Model,"
Journal of Political Economy,
University of Chicago Press, vol. 88(2), pages 221-233, April.
- Laurence Weiss, 1978. "The Role for Active Monetary Policy in a Rational Expectations Model," Cowles Foundation Discussion Papers 491, Cowles Foundation for Research in Economics, Yale University.
- Barro, Robert J., 1976. "Rational expectations and the role of monetary policy," Journal of Monetary Economics, Elsevier, vol. 2(1), pages 1-32, January.
- McCallum, Bennett T, 1980. "Rational Expectations and Macroeconomic Stabilization Policy: An Overview," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 12(4), pages 716-746, November.
When requesting a correction, please mention this item's handle: RePEc:aea:aecrev:v:76:y:1986:i:1:p:33-42. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jane Voros)or (Michael P. Albert)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.