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Convention, interest rates and monetary policy: a post-Keynesian–French-conventions-school approach

  • André de Melo Modenesi

    (Federal University of Rio de Janeiro)

  • Rui Lyrio Modenesi

    (Fluminense Federal University)

  • José Luis Oreiro

    (Universidade de Brasilia)

  • Norberto Montani Martins

    (Federal University of Rio de Janeiro)

This article aims at analysing the relationship between conventions and monetary policy using both the post-Keynesian and the French-conventions-school approaches, treated as complementary; and stressing the design of monetary policy frameworks (for example, inflation targeting) and the setting of interest rates as phenomena highly governed by conventions. The Brazilian monetary policy after the mid 1990s – marked by the highest real interest rates in the world – will be used as a case study.

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Article provided by Edward Elgar Publishing in its journal European Journal of Economics and Economic Policies: Intervention.

Volume (Year): 10 (2013)
Issue (Month): 1 ()
Pages: 76-92

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Handle: RePEc:elg:ejeepi:v:10:y:2013:i:1:p76-92
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  1. Jean-Pierre Dupuy, 1989. "Convention et Common knowledge," Revue Économique, Programme National Persée, vol. 40(2), pages 361-400.
  2. Gilberto A. Libânio, 2009. "Aggregate demand and the endogeneity of the natural rate of growth: evidence from Latin American economies," Cambridge Journal of Economics, Oxford University Press, vol. 33(5), pages 967-984, September.
  3. David Dequech, 2011. "Financial conventions in Keynes's theory: the stock exchange," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 33(3), pages 469-490, April.
  4. Miguel A. León-Ledesma & A. P. Thirlwall, 1998. "The Endogeneity of the Natural Rate of Growth," Studies in Economics 9821, School of Economics, University of Kent.
  5. Denzau, Arthur T & North, Douglass C, 1994. "Shared Mental Models: Ideologies and Institutions," Kyklos, Wiley Blackwell, vol. 47(1), pages 3-31.
  6. Andr de Melo Modenesi & Norberto Montani Martins & Rui Lyrio Modenesi, 2013. "A modified Taylor rule for the Brazilian economy: convention and conservatism in eleven years of inflation targeting (2000-2010)," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 35(3), pages 463-482, April.
  7. Dequech, David, 2009. "Institutions, social norms, and decision-theoretic norms," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 70-78, October.
  8. Hicks, John, 1977. "Economic Perspectives: Further Essays on Money and Growth," OUP Catalogue, Oxford University Press, number 9780198284079, December.
  9. J. M. Keynes, 1937. "The General Theory of Employment," The Quarterly Journal of Economics, Oxford University Press, vol. 51(2), pages 209-223.
  10. Paul Davidson, 2002. "Financial Markets, Money and the Real World," Books, Edward Elgar Publishing, number 2467.
  11. N/A, 1989. "Editor's Introduction," Review of Radical Political Economics, Union for Radical Political Economics, vol. 21(3), pages NP-NP, September.
  12. David Dequech, 2003. "Conventional and unconventional behavior under uncertainty," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 26(1), pages 145-168, October.
  13. Philip Arestis & Fernando Ferrari-Filho & Luiz Fernando de Paula, 2011. "Inflation targeting in Brazil," International Review of Applied Economics, Taylor & Francis Journals, vol. 25(2), pages 127-148.
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