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Money Supply Announcements and Market Reactions in an Open Economy


  • Deaves, Richard


An open economy model of the money supply announcement-financial market reaction phenomenon under policy anticipations is formulated, whose major divergence from earlier models is the prediction that short-term interest rate movements need not be positively correlated with unexpectedly high monetary growth. While at variance with the most consistent empirical regularity in the United States, this prediction in fact accords with previous empirical findings for both the United Kingdom and Canada. Copyright 1990 by Ohio State University Press.

Suggested Citation

  • Deaves, Richard, 1990. "Money Supply Announcements and Market Reactions in an Open Economy," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 22(2), pages 154-164, May.
  • Handle: RePEc:mcb:jmoncb:v:22:y:1990:i:2:p:154-64

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    References listed on IDEAS

    1. Olivier Jean Blanchard & Peter Diamond, 1994. "Ranking, Unemployment Duration, and Wages," Review of Economic Studies, Oxford University Press, vol. 61(3), pages 417-434.
    2. Jackman, Richard & Layard, Richard, 1991. "Does Long-term Unemployment Reduce a Person's Chance of a Job? A Time-Series Test," Economica, London School of Economics and Political Science, vol. 58(229), pages 93-106, February.
    3. Dickens, William T, et al, 1989. "Employee Crime and the Monitoring Puzzle," Journal of Labor Economics, University of Chicago Press, vol. 7(3), pages 331-347, July.
    4. Peter A. Diamond, 1982. "Wage Determination and Efficiency in Search Equilibrium," Review of Economic Studies, Oxford University Press, vol. 49(2), pages 217-227.
    5. repec:fth:harver:1515 is not listed on IDEAS
    6. Louis N. Christofides & Andrew J. Oswald, 1992. "Real Wage Determination and Rent-Sharing in Collective Bargaining Agreements," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 985-1002.
    7. Olivier Jean Blanchard & Peter A. Diamond, 1989. "The Aggregate Matching Function," NBER Working Papers 3175, National Bureau of Economic Research, Inc.
    8. Alan B. Krueger & Lawrence H. Summers, 1986. "Reflections on the Inter-Industry Wage Structure," NBER Working Papers 1968, National Bureau of Economic Research, Inc.
    9. Nickell, Stephen J, 1990. "Unemployment: A Survey," Economic Journal, Royal Economic Society, vol. 100(401), pages 391-439, June.
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    Cited by:

    1. Richard Podpiera, 2000. "Efficiency of Financial Markets in Transition: The Case of Macroeconomic Releases," CERGE-EI Working Papers wp156, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    2. Valente, Giorgio, 2009. "International interest rates and US monetary policy announcements: Evidence from Hong Kong and Singapore," Journal of International Money and Finance, Elsevier, vol. 28(6), pages 920-940, October.
    3. Eva A. Arnold, 2013. "The Role of Data Revisions and Disagreement in Professional Forecasts," Macroeconomics and Finance Series 201303, Hamburg University, Department Wirtschaft und Politik.

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