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Measuring Monetary Policy

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  • Ben S. Bernanke
  • Ilian Mihov

Abstract

We develop a model-based, VAR methodology for measuring innovations in monetary policy and their macroeconomic effects. Using this framework, we are able to compare existing approaches to measuring monetary policy shocks and derive a new measure of policy innovations based directly on (possibly time-varying) estimates of the central bank's operating procedures. We also propose a new measure of the overall stance of policy (including the endogenous or systematic component) that is consistent with our approach.

Suggested Citation

  • Ben S. Bernanke & Ilian Mihov, 1998. "Measuring Monetary Policy," The Quarterly Journal of Economics, Oxford University Press, vol. 113(3), pages 869-902.
  • Handle: RePEc:oup:qjecon:v:113:y:1998:i:3:p:869-902.
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    File URL: http://hdl.handle.net/10.1162/003355398555775
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    More about this item

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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