EconPapers    
Economics at your fingertips  
 

Money stock targeting and money supply: an intertemporal optimization approach, with an application to Canada

Jean Mercenier () and Khalid Sekkat

ULB Institutional Repository from ULB -- Universite Libre de Bruxelles

Abstract: We propose a model of the short‐term behaviour of the monetary authorities of a small open economy that is willing to stabilize, to some extent, its bilateral exchange rate vis‐à‐vis a dominant partner. The optimal money supply strategy is derived using intertemporal optimization arguments, in a rational expectations environment, The model is formulated so as to avoid the time inconsistency problem stressed by Kydland and Prescott (1977). It allows econometric estimation of the optimal money supply rule as well as of the parameters of the intertemporal utility function, and of the function that defines the intermediate target money stock. The model is successfully estimated on Canadian quarterly data, using maximum‐likelihood techniques. Copyright © 1988 John Wiley & Sons, Ltd.

Date: 1988
Note: SCOPUS: ar.j
References: Add references at CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed

Published in: Journal of Applied Econometrics (1988) v.3 n° 3,p.215-228

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

Related works:
Journal Article: Money Stock Targeting and Money Supply: An Intertemporal Optimization Approach (with an Application to Canada) (1988) 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:ulb:ulbeco:2013/7304

Ordering information: This working paper can be ordered from
http://hdl.handle.ne ... .ulb.ac.be:2013/7304

Access Statistics for this paper

More papers in ULB Institutional Repository from ULB -- Universite Libre de Bruxelles Contact information at EDIRC.
Bibliographic data for series maintained by Benoit Pauwels ().

 
Page updated 2022-09-19
Handle: RePEc:ulb:ulbeco:2013/7304