Monetary policy games with broad money targets: a linear quadratic control analysis of the U.S. and Japan
Article Abstract:
The effect of monetary policies pursued by the Federal Reserve and the Bank of Japan in both a cooperative and noncooperative equilibrium situation is analyzed. Vector-autoregressive models are used in the analysis along with stochastic linear quadratic functions. Results show that there is no significant difference between the effect of the two equilibria. Furthermore, long-range monetary goals are seen to favorably affect the economic stability of the two countries.
Publication Name: Journal of Economic Dynamics & Control
Subject: Economics
ISSN: 0165-1889
Year: 1995
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The 'laissez faire' bias of managed floating
Article Abstract:
The study of the 'laissez faire' bias of time consistent monetary policy, using two customized, continuous time models of managed floating, showed a marked bias in the first model, wherein the essentials were costly to modify. The second model, wherein the central bank attempted to stabilize exchange rate stability and monetary autonomy, showed that the time consistency hindrance was so difficult that the optimum managed exchange rate was a free float.
Publication Name: Journal of International Money and Finance
Subject: Economics
ISSN: 0261-5606
Year: 1997
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