In a recent paper,3 Professors Stein and Nagatani (SN) have examined monetary stabilization policies in a full employment nonlinear monetary growth model. Specifically, they try to give a " rigorous answer " to the question of which should be the correct control variable of monetary policy; i.e., money supply growth, interest rates, or some other variable. The model used is of the Keynes-Wickse...

Bahrain is a very small oil-exporting country in the Middle East with a fixed exchange rate against the US dollar and has no restricton capital flows. Because its economy evolves around the oil sector, its economy is thought to be vulnerable to oil price movements. It is feared that the recent oil price hike would feed from foreign assets to monetary base and money supply to inflation. Empirica...

In this study, we examined the effects of monetary policy shocks on the performance of the Iranian macroeconomy and the banking system, under the different situations of the Basel II and III capital requirements regulations. By developing a DSGE Model and according to its structural shocks, four observable variables including output gap, bank capital adequacy, inflation, and money base growth r...

A segmented markets model of monetary policy is constructed, in which a novel feature is goods market segmentation, and its relationship to conventional asset market segmentation. The implications of the model for the response of prices, interest rates, consumption, labor supply, and output to monetary policy are determined. As well, optimal monetary policy is studied, as are the costs of infla...

‘The idea of adjusting the monetary base to reflect changes in reserve requirements was proposed initially by Karl Brunner (1961) in an effort to formulate an “empirically significant theory” of the money supply process. Brunner called this adjustment “liberated reserves.” He was the first to compile data on the adjusted monetary base and empirically investigate the relationship between his mea...

A segmented markets model of monetary policy is constructed, in which a novel feature is goods market segmentation, and its relationship to conventional asset market segmentation. The implications of the model for the response of prices, interest rates, consumption, labor supply, and output to monetary policy are determined. As well, optimal monetary policy is studied, as are the costs of infla...