Reducing our ignorance about monetary policy effects

Eric Leeper

Economic Review, 1995, vol. 80, issue Jul, 38 pages

Abstract: Business news often gives the impression that the effects of monetary policy on the macroeconomy are well understood and predictable. The author of this article, however, believes that, far from sharing such certainty, policymakers and economists alike have knowledge limited by difficulties in sorting out causal factors in economic data. He holds that monetary policy effects are neither well understood nor easily predicted. ; The article presents five models of private and monetary policy behavior in the United States. Identical policy experiments--an unanticipated one-time monetary policy contraction--performed in each model show different qualitative and quantitative effects of policy from one model to the next. The author considers a variety of methods for ranking the models according to their plausibility and suggests that because each model has its limitations, it would be wise for policy advisors to be eclectic in formulating advice.

Keywords: Monetary; policy (search for similar items in EconPapers)
Date: 1995
References: Add references at CitEc
Citations: View citations in EconPapers (6)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedaer:y:1995:i:jul:p:1-38:n:v.80no.4

Ordering information: This journal article can be ordered from

Access Statistics for this article

More articles in Economic Review from Federal Reserve Bank of Atlanta Contact information at EDIRC.
Bibliographic data for series maintained by Meredith Rector ().