Last edited by Taugore
Thursday, May 14, 2020 | History

2 edition of use of monetary aggregate to target nominal GDP found in the catalog.

use of monetary aggregate to target nominal GDP

Martin S. Feldstein

use of monetary aggregate to target nominal GDP

by Martin S. Feldstein

  • 59 Want to read
  • 29 Currently reading

Published by National Bureau of Economic Research in Cambridge, Mass .
Written in English

    Subjects:
  • Monetary policy -- United States -- Econometric models.,
  • National income -- United States -- Econometric models.,
  • Money supply -- United States -- Econometric models.

  • Edition Notes

    StatementMartin Feldstein, James H. Stock.
    SeriesNBER working paper series -- no.4304
    ContributionsStock, James H., National Bureau of Economic Research.
    The Physical Object
    Pagination55,[18]p. :
    Number of Pages55
    ID Numbers
    Open LibraryOL19592919M

      IntroductionMonetary policy is important for two key reasons. First, monetary policy determines the path of the price level, and it heavily influences other variables like nominal wages and nominal GDP. As seen in the s, high inflation can be damaging to the health of the economy and to the well-being of individual citizens. Savers are punished, and resources are diverted.   The responses of the model variables to monetary policy actions over the estimation period are as expected based on monetary theory and previous empirical studies: contractionary monetary policy (i.e., an increase in the federal funds rate) has a negative but transitory effect on real GDP, a delayed but then persistent effect on the GDP.

    IMPACT OF MONETARY POLICY ON GROSS DOMESTIC PRODUCT (GDP) by One of the important and crucial intermediate target variables of monetary Policy in Pakistan is money supply. The SBP has been using M2 aggregate (i.e., currency + demand deposits + time deposits) for policy purposes on the assumption that the demand for M2 function is stable in File Size: KB. NOMINAL GDP targeting is not a new idea. It has an intellectual pedigree that goes back well before the crisis, but even if we just focus on the recent debate over changing Fed policy to targeting.

    Start studying ECO PS8. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Monetary policy affects GDP and the price level by: in the short run, the real money supply increases whereas inflation targeting constructs monetary policy based on a target . Monetary Aggregates as Targets: Some Theoretical Aspects Charles Freedman. NBER Working Paper No. Issued in September NBER Program(s):Monetary Economics In the mids the Bank of Canada, along with a number of other central banks, began to set explicit targets for monetary growth and to emphasize the long-run role of monetary aggregates in controlling the rapid upward trend of .


Share this book
You might also like
Jan Dibbets

Jan Dibbets

Class Clown (Riverdale High)

Class Clown (Riverdale High)

The looking glass war.

The looking glass war.

Emmanuel College.

Emmanuel College.

The 2000-2005 Outlook for Flavored Bottled Water in Europe

The 2000-2005 Outlook for Flavored Bottled Water in Europe

Bio-organization.

Bio-organization.

Effects of certain freezing methods upon microbes associated with chicken meat.

Effects of certain freezing methods upon microbes associated with chicken meat.

Czechoslovakia, land of dream and enterprise

Czechoslovakia, land of dream and enterprise

The investigation of the Soldiers Home at Leavenworth, Kans.

The investigation of the Soldiers Home at Leavenworth, Kans.

Horary astrology

Horary astrology

National flood insurance act of 1967.

National flood insurance act of 1967.

Statistical analysis of policy and claims data in non-life insurance

Statistical analysis of policy and claims data in non-life insurance

Open your eyes!!!

Open your eyes!!!

The impact of informal school fees on family expenditures

The impact of informal school fees on family expenditures

Of human bondage

Of human bondage

Abbotsford and Newstead Abbey

Abbotsford and Newstead Abbey

Use of monetary aggregate to target nominal GDP by Martin S. Feldstein Download PDF EPUB FB2

9 The Use of Monetary Aggregate to Target Nominal GDP be achieved by sufficiently limiting the rate of growth of a broad monetary aggregate over a long enough period of time. All the monetary policy rules that we consider in this paper are compatible with achieving any particular long-run average rate of inflation.

Moreover, inCited by: This paper studies the possibility of using the broad monetary aggregate M2 to target the quarterly rate of growth of nominal GDP. Our findings indicate that the Federal Reserve could probably guide M2 in a way that reduces not only the long-term average rate of inflation but also the variance of the annual rate of growth of nominal by: The Use of a Monetary Aggregate to Target Nominal GDP Martin Feldstein, James H.

Stock Chapter in NBER book Monetary Policy (), N. Gregory Mankiw, editor (p. 7 - 69). Use of monetary aggregate to target nominal GDP. Cambridge, MA: National Bureau of Economic Research, [] (OCoLC) Material Type: Internet resource: Document Type: Book, Internet Resource: All Authors / Contributors: Martin S Feldstein; James H.

Abstract: This paper studies the possibility of using the broad monetary aggregate M2 to target the quarterly rate of growth of nominal GDP. Our findings indicate that the Federal Reserve could probably guide M2 in a way that reduces not only the long-term average rate of inflation but also the variance of the annual rate of growth of nominal by: Abstract.

This paper studies the possibility of using the broad monetary aggregate M2 to target the quarterly rate of growth of nominal GDP. Our findings indicate that the Federal Reserve could probably guide M2 in a way that reduces not only the long-term average rate of inflation but also the variance of the annual rate of growth of nominal GDP.

This paper studies the possibility of using the broad monetary aggregate M2 to target the quarterly rate of growth of nominal GDP. Our findings indicate that the Federal Reserve could probably guide M2 in a way that reduces not only the long-term average rate of inflation but also the variance of the annual rate of growth of nominal GDP.

Conduct monetary policy (set the reference interest rate) to keep nominal GDP growth at or close to that target rate. Equivalent alternatives include targeting the level of nominal income (more on this below), or choosing dif-ferent proxies for aggregate nominal spending.

1 Accordingtoitsproponents, andunderlong-runmoney-neutrality, achiev File Size: KB. procedures. Target ranges for nominal GDP growth might be used in the same way that target ranges for the monetary aggregates have been used in the past. Under such a procedure, policymakers would moni-tor the actual rate of nominal GDP growth relative to target.

They would then use this information, along with other indicators, to make discretionary. The monetary aggregate chosen by the Germans was central bank money, a narrow aggregate which is the sum of currency in circulation and bank deposits weighted by the required reserve ratios. Inthe Bundesbank switched targets from central bank money to M3.

The Swiss began targeting the M1 monetary aggregate. -- Abstract: This paper studies the possibility of using the broad monetary aggregate M2 to target the quarterly rate of growth of nominal GDP. Our findings indicate that the Federal Reserve could.

The use of monetary aggregate to target nominal GDP. [Martin Feldstein; James H Stock] Home. WorldCat Home About WorldCat Help. Search. Search for Library Items Search for Lists Search for Contacts Search for a Library.

Create Book\/a>, schema:CreativeWork\/a>, schema. There are two particularly relevant proposals: (1) the proposal by Barnett, Chauvet, and Leiva-Leon () to use a Divisia monetary aggregate as an indicator in the monthly Nowcasting of nominal GDP, as needed in implementation of any nominal GDP targeting policy; and (2) the proposal by Belongia and Ireland () to use a Divisia monetary aggregate as an intermediate target, with nominal GDP.

A nominal income target is a monetary policy target. Such targets are adopted by central banks to manage national economic activity. Nominal aggregates are not adjusted for inflation. Nominal income aggregates that can serve as targets include nominal gross domestic product and nominal gross domestic income.

Central banks use a variety of techniques to hit their targets, including. LONDON – Ever since Western central banks started targeting inflation in the early s, some economic analysts – not least Samuel Brittan of the Financial Times – have been pointing out that it would be better to target nominal GDP.

As the numerical value of all output or expenditure in an economy, nominal GDP combines a country’s real economic output with its associated prices or.

The basic idea behind nominal income targeting is that the central bank would establish a target growth rate for nominal income in the economy (as measured by, for example, nominal GDP). When nominal income is below its target, the central bank would engage in expansionary monetary policy by increasing the money supply.

1: The Use of a Monetary Aggregate to Target Nominal GDP Martin Feldstein, James H. Stock. 2: Nominal Income Targeting Robert E. Hall, N. Gregory Mankiw. 3: Nonstandard Indicators for Monetary Policy: Can Their Usefulness Be Judged from Forecasting Regressions. Michael Woodford 4: On Sticky Prices: Academic Theories Meet the Real World Alan S.

There is an inflation-stabilizing rate of unemployment, and a wage-price inflation spiral develops if unemployment is kept lower than this. Monetary policy affects aggregate demand and inflation through a variety of channels. Adverse shocks, such as an oil price. Chapters in this book: Introduction to "Monetary Policy", pp N.

Gregory Mankiw The Use of a Monetary Aggregate to Target Nominal GDP, pp Martin Feldstein and James Stock Nominal Income Targeting, pp Robert Hall and N. Gregory Mankiw. Case for a Nominal GDP Target In the sections that follow, the article further outlines the argu-ments of Koenig (), Sheedy (), Azariadis et al.

(), and. If the level target is and the Fed only achieves a level of 99 in a given year, it must engage in monetary expansion in the following year to get back on the target path.

To target the market forecast for NGDP, the Fed could establish an NGDP futures market. Feldstein, Martin and Jim Stock (), “The Use of a Monetary Aggregate to Target Nominal GDP”, NBER Working Paper.

Gordon, Bob (), “The conduct of domestic monetary policy”, NBER Working Paper. Hall, Robert E and N Gregory Mankiw (), Nominal inflation targeting.Specifically, a monetary regime that targets the growth path of nominal GDP (NGDP) can be shown to reproduce the distribution of risk that would exist if there were widespread use of state.