This paper examines the relation between granting central banks more independence represented in both its manifested legal charter as well actual practices adopted and inflation Egypt during period from 1998-2019. To do so, this first looks at evolution of different bank (CBI) measures adopts most comprehensive relevant one. Consequently, it runs a regression model adopting an autoregressive di...

Bank of England, one the leading examples modern banking, has been established at end 17th century. Economic and social turmoils wars that broke up in first half 19th century have led to a serious debate between Currency School Banking regarding primary function BoE. The Charter Act dated 1844 enacted eliminate ongoing instabilities British economy. act was suspended 1847, 1857, 1866 because de...

Credible and optimal monetary policies are considered in environments in which the government observes a signal that is correlated with the state of the economy. When the signal is public information it is optimal for monetary policy to be conditioned upon it. The extent to which such conditioning should occur when the signal is the private information of the government depends upon the governm...

This paper presents empirical evidence on the e¢ cacy of forecast averaging using the ALFRED real-time database. We consider averages taken over a variety of di¤erent bivariate VAR models that are distinguished from one another based upon at least one of the following: which variables are used as predictors, the number of lags, using all available data or data after the Great Moderation, the ob...

This paper investigates the effectiveness of one of the Federal Reserve’s unconventional monetary policy tools, the term auction facility (TAF). At issue is whether the TAF reduced the spread between the London interbank offered rate (LIBOR) rates and equivalent-term Treasury rates by reducing the liquidity premium embedded in LIBOR rates. This paper suggests that rather than reducing the liqui...

In this paper we examine the link between stock market uncertainty and monetary policy in the US. There are strong arguments why central banks should account for stock market uncertainty in their strategy. Amongst others, they can maintain the functioning of financial markets and moderate possible economic downswings. To describe the behavior of the Federal Reserve Bank, augmented forward-looki...

In this paper we study the role of the exchange rate in conducting monetary policy in an economy with near-zero nominal interest rates as experienced in Japan since the mid-1990s. Our analysis is based on an estimated model of Japan, the United States and the euro area with rational expectations and nominal rigidities. First, we provide a quantitative analysis of the impact of the zero bound on...

This paper revisits the classic discretion versus commitment debate when a policymaker issues signals and agents choose to ignore them or not. Besides responding with discretion to agents’ actions or committing to a plan ex ante, a policymaker can also choose an adaptation policy, where she commits after agents make learning decisions but before agents take actions. Two mechanisms are at work i...

We use the limited participation model of money as a laboratory for studying the operating characteristics of Taylor rules for setting the rate of interest. Rules are evaluated according to their ability to protect the economy from bad outcomes such as the burst of in°ation observed in the 1970s. Based on our analysis, we argue for a rule which: (i) raises the nominal interest rate more than on...

Policy changes in Indonesian banking from 1983 through 1990 saw the removal of controls on interest rates, lending, and expansion of branch networks, and of barriers to entry. The dismantling of loan subsidy programmes financed by the central bank ran in parallel with these changes. Private banks have been enabled to erode rapidly the market share of the previously dominant, but less efficient ...