Sequential markets and the suboptimality of the Friedman rule

• 成果类型: Article; Proceedings Paper
• 署名作者: Williamson, SD
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/0304-3932(96)01259-7
• 发表日期: 1996
• 页码: 549-572
• 关键词: Monetary policy; liquidity

摘要

A cash-in-advance model with sequential markets is constructed, where unanticipated monetary injections are nonneutral and can potentially produce large liquidity effects. However, if the monetary authority adheres to an optimal money rule, money should not respond to unanticipated shocks, so that a Friedman rule is suboptimal and the monetary authority does not exploit the liquidity effect. Quantitatively, the model can generate variability in money and nominal interest rates close to what is observed, and can produce data with no obvious evidence of the existence of liquidity effects.