Monetary Policy Analysis in Models Without Money

Bennett McCallum ()

No 8174, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The following arguments are developed: (i) models without monetary aggregates do not imply that inflation is a non-monetary phenomenon and are not necessarily non-monetary models; (ii) theoretical considerations suggest that such models are misspecified, but the quantitative significance of this misspecification is very small; (iii) some prominent arguments based on indeterminacy' findings are of dubious merit: there are reasons for believing that findings of solution multiplicity are theoretical curiosities that have no real world significance; (iv) monetary policy rules that violate the Taylor principle, by contrast, possess another characteristic the absence of E-stability that suggests undesirable behavior in practice.

JEL-codes: E52 E30 (search for similar items in EconPapers)
Date: Written
Note: EFG ME
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Journal Article: Monetary policy analysis in models without money (2001)
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