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Speed Limit Policies and Interest Rate Smoothing

Author

Listed:
  • James Yetman

    (University of Hong Kong)

Abstract

Walsh (2003) argued that U.S. monetary policy can be described as following a "speed limit" policy. Here I show that this provides an explanation for the apparent interest rate smoothing present in central bank policy.

Suggested Citation

  • James Yetman, 2004. "Speed Limit Policies and Interest Rate Smoothing," Economics Bulletin, AccessEcon, vol. 5(17), pages 1-6.
    • Handle: RePEc:ebl:ecbull:eb-04e50011
    as

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    References listed on IDEAS

    as
    1. Yetman, James, 2005. "The credibility of the monetary policy "free lunch"," Journal of Macroeconomics, Elsevier, vol. 27(3), pages 434-451, September.
    2. Ozlale, Umit, 2003. "Price stability vs. output stability: tales of federal reserve administrations," Journal of Economic Dynamics and Control, Elsevier, vol. 27(9), pages 1595-1610, July.
    3. Rudebusch, Glenn D., 2002. "Term structure evidence on interest rate smoothing and monetary policy inertia," Journal of Monetary Economics, Elsevier, vol. 49(6), pages 1161-1187, September.
    4. David Cobham, 2003. "Why does the Monetary Policy Committee smooth interest rates?," Oxford Economic Papers, Oxford University Press, vol. 55(3), pages 467-493, July.
    5. Currie,David & Levine,Paul, 2009. "Rules, Reputation and Macroeconomic Policy Coordination," Cambridge Books, Cambridge University Press, number 9780521104609.
    6. Yetman, James, 2006. "Are speed limit policies robust?," Journal of Macroeconomics, Elsevier, vol. 28(4), pages 665-679, December.
    7. Carl Walsh, 2003. "Speed Limit Policies: The Output Gap and Optimal Monetary Policy," American Economic Review, American Economic Association, vol. 93(1), pages 265-278, March.
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    Keywords

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    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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