Poole Revisited

Fabrice Collard, Harris Dellas (harris.dellas@gmail.com) and Guy Ertz
Additional contact information
Fabrice Collard: CEPREMAP-CNRS, Paris
Guy Ertz: UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)

No 1998023, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: We study the properties of alternative central bank targeting procedures in a general equilibrium, monetary model with labor contracts, endogenous velocity and three shocks: money demand, supply and fiscal. Money demand -velocity- shocks emerge as the main source of macroeconomic volatility. Consequently, nominal interest rate targeting results in greater stability than money targeting. Interestingly this holds independent of the type of the shock (unlike Poole). Interest rate targeting also generates a substantially higher level of welfare.

Keywords: Central Bank; Targeting Procedures; Velocity Shocks; Business Cycles (search for similar items in EconPapers)
JEL-codes: E30 E50 E58 (search for similar items in EconPapers)
Pages: 23
Date: 1998-07-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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http://sites.uclouvain.be/econ/DP/IRES/9823.pdf (application/pdf)

Related works:
Journal Article: Poole Revisited (2011)
Working Paper: Poole Revisited (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:1998023

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