in this paper, by using dynamic stochastic general equilibrium, optimal monetary rule derived for central bank of iran. monetary transmission mechanism of the model includes four equations, aggregate demand, aggregate supply, oil price and taylor rule. we have proved that dynamic structure of aggregate demand relation, regarding monetary inflation in iran, is a function of money growth rate. wi...

Central bank behavior is often summarized by simple rules for operating targets, i.e., for a short-run nominal interest rate or for a money growth rate. In this paper we examine conditions under which these rules lead to identical fundamental solutions of a conventional business cycle model. When prices are ‡exible, forward looking interest rate rules can be equivalent to money growth policy. I...

This paper reexamines the role of money demand for the local dynamics of a sticky price model where money enters the utility function and monetary policy is either conducted according to a Taylor-type interest rate rule or to a Friedman-type constant money growth rule. It is shown that activeness, which is commonly recommended as a device for a stabilizing interest rate policy, leads to stable ...

According to the logic of the Friedman rule, the opportunity cost of holding money faced by private agents should equal the social cost of creating additional fiat money. Thus nominal rates of interest should be zero. This logic has been shown to be correct in a number of contexts, with and without various distortions. In practice, however, economies that have confronted very low nominal rates ...

ship exists between the quantity of money and the general level of prices. Confidence This paper introduces a mechanism for in this relationship, expressed in terms of generating a series of rules that characterize long-run rates of money growth and inflation, the money-price relationship, defined as the along with an accumulation of evidence suprelationship between the rate of growth of portin...

This paper estimates a reduced-form model of the Japanese economy that incorporates a role for money in the determination of GDP growth and inflation. Real base money growth is shown to be a significant determinant of GDP growth, suggesting a role for money even under a monetary policy operating regime in which base money is endogenous to the determination of an official interest rate. An aggre...