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Microfoundations of a monetary policy, Poole's rule

Author

Listed:
  • Joab Dan VALDIVIA CORIA
  • Daney David VALDIVIA CORIA

    (Central Bank of Bolivia)

Abstract

This paper develops a monetary policy rule based on Poole's framework, analyzing how money supply reacts to product gap, interest rate gap, observed interest rate, product expectations, and inflation. Using a DSGE model, the study evaluates the rule's applicability in economies outside conventional inflation targeting regimes.

Suggested Citation

  • Joab Dan VALDIVIA CORIA & Daney David VALDIVIA CORIA, 2019. "Microfoundations of a monetary policy, Poole's rule," Journal of Economics Bibliography, EconSciences Journals, vol. 6(3), pages 118-160, September.
    • Handle: RePEc:cvv:journ6:v:6:y:2019:i:3:p:118-160
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    References listed on IDEAS

    as
    1. Yun, Tack, 1996. "Nominal price rigidity, money supply endogeneity, and business cycles," Journal of Monetary Economics, Elsevier, vol. 37(2-3), pages 345-370, April.
    2. William Poole, 1969. "Optimal choice of monetary policy instruments in a simple stochastic macro model," Special Studies Papers 2, Board of Governors of the Federal Reserve System (U.S.).
    3. Frank Smets & Rafael Wouters, 2007. "Shocks and Frictions in US Business Cycles: A Bayesian DSGE Approach," American Economic Review, American Economic Association, vol. 97(3), pages 586-606, June.
    4. Turnovsky, Stephen J, 1975. "Optimal Choice of Monetary Instrument in a Linear Economic Model with Stochastic Coefficients," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 7(1), pages 51-80, February.
    5. William Poole, 1970. "Optimal Choice of Monetary Policy Instruments in a Simple Stochastic Macro Model," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(2), pages 197-216.
    6. Lloyd A. Metzler, 1950. "The Rate of Interest and the Marginal Product of Capital," Journal of Political Economy, University of Chicago Press, vol. 58(4), pages 289-289.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

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    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination

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