EconPapers    
Economics at your fingertips  
 

Monetary policy inertia: fact or fiction?

Glenn Rudebusch ()

No 2005-19, Working Paper Series from Federal Reserve Bank of San Francisco

Abstract: Estimated monetary policy rules often appear to indicate a sluggish partial adjustment of the policy interest rate by the central bank. In fact, such evidence does not appear to be persuasive, since the illusion of monetary policy inertia may reflect spuriously omitted persistent influences on the setting of policy. Similarly, theoretical arguments do not provide a compelling case for real-world policy inertia. However, empirical evidence on the policy rule obtained by examining expectations of future monetary policy embedded in the term structure of interest rates is very informative and indicates that the actual amount of policy inertia is quite low.

Keywords: Monetary policy; Interest rates (search for similar items in EconPapers)
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed

Downloads: (external link)
http://www.frbsf.org/economic-research/files/wp05-19bk.pdf (application/pdf)

Related works:
Journal Article: Monetary Policy Inertia: Fact or Fiction? (2006) Downloads
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:fedfwp:2005-19

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Working Paper Series from Federal Reserve Bank of San Francisco Contact information at EDIRC.
Bibliographic data for series maintained by Federal Reserve Bank of San Francisco Research Library ().

 
Page updated 2019-06-18
Handle: RePEc:fip:fedfwp:2005-19