This paper investigates the dynamic effects of monetary and fiscal policy in a monetary union, which is characterized by asymmetric interest rate transmission. This asymmetry gives rise to intertemporal reversals in the relative effectiveness of policy on member country outputs. The direction and the number of these reversals depend on whether policies are unanticipated or anticipated. We also ...

in last 1990 decade and early 21 century due to high fluctuations in assets prices and occurring asset price bubbles, most studies in monetary economics has concentrated on the reaction of monetary policy to movement in asset prices. the purpose of this paper is to analyze the suitable reaction of monetary policy to movement in asset prices in iran. this analysis is based on the structural var ...

Financial Globalization and Monetary Policy* The process of financial globalization has significantly altered the environment in which national monetary policy authorities operate. What implications does this have for the design of monetary policy? The question can be properly addressed only in the context of a model where monetary policy interacts with financial market efficiency. This paper i...

â  monetary policy rule is an approach to avoid time inconsistency problem as regarded by new classical economist to choose a time plan for policy making in order to maximize households’ well-being. the foundation of time inconsistency problem is not coincidence of expectations as an ex-ante variable, which is expected variable, with actual variable as an ex-post variable. expectations in fin...

the ultimate goal of monetary policy is to achieve price stability and high output. in this regard, central banks usually change the interest rate, liquidity, and money base in order to apply monetary policies. the john b. taylor rule is one of the rules known in the transmission of monetary policy.[1] based on this rule and given the output gap and inflation gap, the central bank increases or ...

Price stability has been the foremost task of monetary policy. The information relating to the response of prices to monetary policy shocks is essential for conducting monetary policy in general and for inflation targeting of central banks in particular. Most of the published empirical studies analyze the response of an aggregate price index like CPI or a consumption deflator and their r...

Well before the global financial crisis, the stance of fiscal policy in a number of countries had raised concerns about risks for the outcomes of monetary policy. To provide some insights this paper examines the fiscal-monetary interactions in a novel game theory framework with asynchronous timing of moves. It generalizes the standard commitment concept of Stackelberg leadership by making it dy...

We re-examine the empirical relevance of the cost channel of monetary policy (e.g. Ravenna andWalsh, 2006), employing recently developed moment-conditions inference methods, including identi…cation-robust procedures. Using US data, our results suggest that the cost channel e¤ect is poorly identi…ed and we are thus unable to corroborate the previous results in the literature. Keywords: Cost chan...

In this paper, we re-examine the empirical relevance of the cost channel of monetary policy. We employ recently developed moment-conditions inference procedures, which provide a more e¢ cient and reliable econometric framework than in previous literature. Using US data, our results suggest that there is no substantial evidence for the existence of a cost channel. Keywords: Cost channel; Phillip...