The role of bank central operating procedures in an economy with productive government spending
Caballé, Jordi (Universitat Autònoma de Barcelona. Departament d'Economia Aplicada)
Hromcová, Jana (Universitat Autònoma de Barcelona. Departament d'Economia Aplicada)

Data:	2011
Resum:	We reexamine some of the issues related to the choice of the monetary policy instrument in a dynamic general equilibrium model exhibiting endogenous growth in which a fraction of productive government spending is Önanced by means of issuing currency. We evaluate the performance of four monetary instruments: monetary aggregate targeting, nominal interest rate targeting, ináation rate targeting and real interest rate targeting. We show that a switch from any other targeting procedure towards the real interest rate targeting may be welfare improving even if the real interest rate targeting is a policy that delivers the most volatile consumption in the short run.
Ajuts:	Ministerio de Ciencia e Innovación ECO2009-09847 Ministerio de Ciencia e Innovación SEJ2007-60671 Agència de Gestió d'Ajuts Universitaris i de Recerca 2009/SGR-00350
Nota:	Altres ajuts: Financial support from the European Commissionís Phare ACE Program, the Spanish Ministry of Science and Innovation through grants ECO2009-09847 and SEJ2007-60671, and the Generalitat of Catalonia through grant SGR2009-00350 is gratefully acknowledged.
Drets:	Tots els drets reservats.
Llengua:	Anglès
Document:	Article ; recerca ; Versió acceptada per publicar
Matèria:	Monetary policy targets ; Productive government spending
Publicat a:	Computational economics, Vol. 37 (2011) , p. 39-65, ISSN 0927-7099

DOI: 10.1007/s10614-010-9198-y

Postprint 29 p, 946.5 KB

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