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Recent developments in the analysis of monetary policy rules

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  • Bennett T. McCallum

Abstract

After a brief review of key developments in application of monetary theory to policy analysis, Bennett T. McCallum describes the central aspects of the typical framework used to analyze monetary policy rules. He reviews the methods used to study the effects of policy behavior and provides an example of how two rules (the McCallum rule and the Taylor rule) can be used to investigate recent monetary policy in Japan. His example shows why it may be important for central banks to develop monetary policy procedures based on monetary-aggregate as well as interest-rate instruments.

Suggested Citation

  • Bennett T. McCallum, 1999. "Recent developments in the analysis of monetary policy rules," Review, Federal Reserve Bank of St. Louis, vol. 81(Nov), pages 3-12.
    • Handle: RePEc:fip:fedlrv:y:1999:i:nov:p:3-12:n:v.81no.6
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    Keywords

    Econometric models; Monetary policy;

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