Monetary Policy Analysis in Models Without Money

By Bennett T Mccallum. 2001

272 citations recorded by the source corpus.

The following arguments are developed: (i) models without monetary aggregates do not imply that inflation is a non-monetary phenomenon and are not necessarily non-monetary models; (ii) theoretical considerations suggest that such models are misspecified, but the quantitative significance of this misspecification is very small; (iii) some prominent arguments based on indeterminacy' findings are of dubious merit: there are reasons for believing that findings of solution multiplicity are theoretical curiosities that have no real world significance; (iv) monetary policy rules that violate the Taylor principle, by contrast, possess another characteristic the absence of E-stability that suggests undesirable behavior in practice.

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/55e3bcd05386e4d6c3af6eb13212809f0a5987fa

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In Economics and Econometrics

1. P. Arestis
2. Malcolm Sawyer
3. Alvaro Angeriz
4. Engelbert Stockhammer
5. Eckhard Hein
6. Bruno Bonizzi

In Finance

1. Alvaro Angeriz
2. Malcolm Sawyer
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4. Bruno Bonizzi
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Citations in the corpus

• Interest rates, distribution and capital accumulation – A post-Kaleckian perspective on the US and Germany (2011, unknown): “See Clarida/Gali/Gertler (1999), Goodfriend (2007), McCallum (2001) , Meyer (2001), Romer (2000), Taylor (2000), and Carlin/Soskice (2006: 27-172) for NCMs.”
• Monetary policy in the UK (2007, background): “Equation (3) contains a stochastic shock element, implying that monetary policy operates with random shocks; this is not always the case in the literature, where in some cases this element is not incorporated in equation (3) – see, for example, McCallum, 2001 ).”
• OVERCOMING T HE Z ERO B OUND ON NOMINAL INTEREST R ATES WITH NEGATIVE I NTEREST ON C URRENCY: G ESELL'S S OLUTION* (2003, unknown): “ McCallum (2001, 2002) also argues that ‘nonfundamental’ solutions, such as the explosively deflationary solutions of our”
• Data Uncertainty and the Role of Money as an Information Variable for Monetary Policy (2005, unknown): “For analysis of this issue in models with explicit microeconomic foundations, see Ireland (2001), McCallum (2001) and Leahy (2001).”
• The Nature and Role of Monetary Policy When Money is Endogenous (2006, unknown): “…interest.3 In some versions of the model a lagged interest rate is included to capture interest rate "smoothing" undertaken by the monetary authorities (see, for example, McCallum 2001).4 We omit it only for the simple reason that our results and analysis are not affected at all by this omission.”
• How Important is Money in the Conduct of Monetary Policy (2006, unknown): “2.2) attributes to McCallum (2001) the argument that in such models “inflation ... can still be regarded as pinned down in the long run by the economy’s steady-state nominal money growth rate.””
• Market Anticipations of Monetary Policy Actions (2002, unknown): “For further discussion, see McCallum (2001).”
• Reinventing fiscal policy (2003, unknown): “The “new consensus” in macroeconomics has been summarized in terms of a simple model with the following three equations (adapted from Meyer 2001; but also see McCallum, 2001, and Clarida et al., 1999; it is also discussed in Arestis and Sawyer, 2002b; 2002c): ( ) ( )− + + = + + − − + 0 1 1 2 1 3 1…”
• Maintaining Low Inflation: Money, Interest Rates, and Policy Stance (2007, unknown): “McCallum (2000) or Taylor (1999) analyses that assess whether observed interest rate settings have been loose or tight relative to a rule when compared to actual inflation”
• Can Monetary Policy Affect the Real Economy (2002, methodology): “2 This enables us to identify the essentials of what has been labelled as the 'new consensus' in macroeconomics (for example, McCallum 2001, Meyer 2001, we have also touched on this issue in Arestis and Sawyer 2002).”
• A Post-Keynesian Amendment to the New Consensus on Monetary Policy (2006, unknown): “However, these new consensus models ‘include no reference to any monetary aggregate’ (McCallum, 2001, p. 145).”