Interest rate rules vs money growth rules - A welfare comparison in a cash-in-advance economy

• 成果类型: Article
• 署名作者: Carlstrom, CT; Fuerst, TS
• 署名单位: University System of Ohio; Bowling Green State University; Federal Reserve System - USA; Federal Reserve Bank - Cleveland
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/0304-3932(95)01221-4
• 发表日期: 1995
• 页码: 247-267
• 关键词: General equilibrium; money and interest rates; monetary policy

摘要

This paper considers the welfare consequences of two particularly simple rules for monetary policy: an interest rate peg and a money growth peg. The model economy consists of a real side that is the standard real business cycle model and a monetary side that amounts to imposing cash-in-advance constraints on certain market transactions. The paper also considers the effect of assuming a rigidity in the typical household's cash savings choice. The competitive equilibrium of the economy is not Pareto efficient, partly because of two distortions: a distortion on the capital accumulation decision and a distortion on portfolio choice that arises from the assumed rigidity. The principal result of the paper is that the interest rate rule (but not the money growth rule) entirely eliminates these two distortions and is thus the benevolent central banker's policy choice.