Monetary policy in the presence of a stochastic deficit
By: John Bryant and Neil Wallace
Contributors: Wallace, Neil
Series: Staff report -- # 42; Staff report (Federal Reserve Bank of Minneapolis. Research Department : Online) -- 42.
Publisher: Federal Reserve Bank of Minneapolis
Published: 1979
Place of publication: Minneapolis, Minn.]
Language: eng
Format: [electronic resource] /
Subjects: Monetary policy; Mathematical models; Stochastic analysis
Description: "This paper presents a welfare analysis of monetary policy rules that differ as regards the extent to which monetary policy accommodates an exogenous, stochastic deficit.  Examples show that a nonaccommodating rule, one involving a higher ratio of bonds to currency the higher the deficit, is not necessarily better than rules that accommodate: either a rule involving a constant ratio of bonds to currency or one involving a lower ratio of bonds to currency the higher the deficit.  Moreover, the nonaccommodating rule can imply more variation in the price level than the accommodating rules"--Federal Reserve Bank of Minneapolis web site.
Notes: Title from PDF file as viewed on 10/16/2007.

Includes bibliographical references.

Also available in print.

System requirements: Adobe Acrobat Reader.

Mode of access: World Wide Web.