Interest and Prices
By Michael Woodford. 2011
3,236 citations recorded by the source corpus.
The title of Michael Woodford’s book is not an accidental echoing of the 1898 work by the great Swedish economist Knut Wicksell. In fact, the book begins with a quotation from Wicksell’s earlier work that contends that perfect price stability, in conjunction with free microeconomic price movements, is the optimal policy for governments to attempt to achieve through their central banks. Today, this contention has become the generally accepted rationale for central bank policy around the world and most central banks use Wicksell’s interest rate approach to achieve price stability rather than the quantity approach favored by Irving Fisher. Such a rules-based approach to policy is discussed at length in the first part of Woodford’s book and taken up again at its end. Woodford argues that “banks around the world have committed themselves more explicitly to relatively straightforward objectives with regard BOOK REVIEWS
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- C. Borio
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Citations in the corpus
- Fiscal Stimulus in a Monetary Union: Evidence from U.S. Regions (2014, unknown): “40 We follow Woodford (2003) in assuming that each firm belongs to an industry x and that there are many firms in each industry.”
- Monetary Aggregates and Liquidity in a Neo-Wicksellian Framework (2008, methodology): “The neo-Wicksellian (NW) model, which belongs 4 to a class of models described by Woodford (2003), features Calvo price setting, flexible wage rates, fixed firm specific capital, and an interest-rate rule that governs monetary policy.”
- Fiscal Policy in an Expectations-Driven Liquidity Trap (2014, unknown): “Woodford, Michael, 2010, “Simple Analytics of the Government Spending Multiplier”, manuscript, Columbia University.”
- Modeling Inflation Dynamics: A Critical Review of Recent Research (2007, background): “As Woodford (2003) has argued, increases in output that are not driven by increases in technological efficiency will tend to raise nominal marginal costs by more than prices in a broad class of models, as workers require higher real wages in order to supply more hours.”
- INTEREST RATE RULES AND MACROECONOMIC STABILITY UNDER HETEROGENEOUS EXPECTATIONS (2012, unknown): “The importance of managing expectations for conducting monetary policy has been recognized and stressed e.g. in Woodford (2003) (p. 15).”
- Financial Globalization and Monetary Policy (2007, methodology): “Using Table 1, the excess returns de nitions (28)-(30), along with assumptions on we may employ (20) to construct e .”
- Housing Market Spillovers: Evidence from an Estimated DSGE Model (2010, unknown): “4We assume a cashless limit in the sense of Woodford (2003).”