Title: Money supply announcements and interest rates: Does monetary policy matter?
Abstract: Most current explanations of the effect of money supply announcements on the rate of interest center on central bank policy. This paper analyzes a flexible price macroeconomic model where present and future monetary policy have no influence on either interest rates or real output, but monetary data signal information about real economic activity which influences both short- and long-term real rates of interest. The magnitude of the interest rate response is shown to depend on the difference in the income elasticities of currency and deposit demand and the relative size of monetary and real disturbances to the economy.
Publication Year: 1985
Publication Date: 1985-03-01
Language: en
Type: article
Indexed In: ['crossref']
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Cited By Count: 22
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