Monetary policy games with broad money targets: a linear quadratic control analysis of the U.S. and Japan
The effect of monetary policies pursued by the Federal Reserve and the Bank of Japan in both a cooperative and noncooperative equilibrium situation is analyzed. Vector-autoregressive models are used in the analysis along with stochastic linear quadratic functions. Results show that there is no significant difference between the effect of the two equilibria. Furthermore, long-range monetary goals are seen to favorably affect the economic stability of the two countries.
Publication Name: Journal of Economic Dynamics & Control
The 'laissez faire' bias of managed floating
The study of the 'laissez faire' bias of time consistent monetary policy, using two customized, continuous time models of managed floating, showed a marked bias in the first model, wherein the essentials were costly to modify. The second model, wherein the central bank attempted to stabilize exchange rate stability and monetary autonomy, showed that the time consistency hindrance was so difficult that the optimum managed exchange rate was a free float.
Publication Name: Journal of International Money and Finance
- Abstracts: Monetary policy under fixed exchange rates: lessons from the Netherlands, Belgium, and Austria, 1973-1992. Industrial clusters and the competitiveness of the Netherlands: empirical results and conceptual issues
- Abstracts: Financial liberalization and adjustment: the cases of Chile and New Zealand. Optimal monetary policies and policy interdependence in the world economy