The evolving role and definition of the federal funds rate in the conduct of U.S. monetary policy
Over the past twenty years, the federal funds rate has evolved from being an intermediate target or indicator variable in discussions of monetary policy to the Federal Reserve’s (exogenous) policy instrument. How the funds rate is characterized has important implications for modeling, particularly in settings such as the popular Taylor Rule. Crucially, however, little investigation has been done to examine whether the funds rate meets the conditions one would require for an instrument of policy. This paper offers empirical evidence on the relationships among the federal funds rate, variables that might influence its behavior and variables of interest to monetary policy.
|Date of creation:||Apr 2009|
|Date of revision:||Aug 2009|
|Contact details of provider:|| Postal: |
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Leonall C. Andersen & Denis S. Karnosky, 1977. "Some considerations in the use of monetary aggregates for the implementation of monetary policy," Review, Federal Reserve Bank of St. Louis, issue Sep, pages 2-7.
- Gunnar Bårdsen & Eilev S. Jansen & Ragnar Nymoen, 1999.
"Econometric Inflation Targeting,"
Working Paper Series
0502, Department of Economics, Norwegian University of Science and Technology, revised 30 Oct 2001.
- Mccallum, Bennet T., 1988. "Robustness properties of a rule for monetary policy," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 29(1), pages 173-203, January.
- Brooks, Chris & Hinich, Melvin J., 1999. "Cross-correlations and cross-bicorrelations in Sterling exchange rates," Journal of Empirical Finance, Elsevier, vol. 6(4), pages 385-404, October.
- Boschen, John F & Talbot, Kathleen E, 1991. "Monetary Base Growth, Deposit Growth, and Inflation in the Postwar United States," The Journal of Business, University of Chicago Press, vol. 64(3), pages 313-37, July.
- Neftci, Salih N, 1984. "Are Economic Time Series Asymmetric over the Business Cycle?," Journal of Political Economy, University of Chicago Press, vol. 92(2), pages 307-28, April.
- Brock, William A. & Sayers, Chera L., 1988. "Is the business cycle characterized by deterministic chaos?," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 71-90, July.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:18970. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.