Search Results
Journal Article
Interdependence: U.S. and Japanese real interest rates
Working Paper
Monetary control, interest rates and exchange rates: the case of Japan, 1973-1986
This paper analyzes the extent to which Japan's success at maintaining a low and stable inflation rate since the mid-1970s, while avoiding a major recession, is attributable to a switch in monetary control procedures by the Bank of Japan toward a so-called "money focused" monetary policy. Through estimation of an explicit Bank of Japan (BoJ) reaction function and using the vector autoregressions methodology, we find that little of the variation in the BoJ operating instrument is associated with an attempt to maintain money aggregates growth along a predetermined path. We do find, however, ...
Working Paper
Central bank secrecy and money surprises: international evidence
The information value of central bank announcements of projected future money growth is shown to depend both on the accuracy of the announcements and the extent to which the announcements themselves are anticipated by the public. We construct a new data set on internal Federal Reserve money projections. These projections, which are kept secret while they are in force, are comparable in many important respects with publicly announced Bank of Japan money projections. Using a derivative of the law of iterated projections, we estimate the information value of disclosure on the part of the Bank ...
Journal Article
What makes a central bank credible?
Working Paper
New results in support of the fiscal policy ineffectiveness proposition
We demonstrate that previous tests of money and fiscal "policy ineffectiveness" are likely to be biased because they ignore interaction effects between policies, induced either by direct policy linkages or through the variation of policies in response to common factors. Our analysis takes into account possible interactive effects between monetary and fiscal policy in an attempt to avoid the biases of previous research. Our empirical analysis of U.S. experience supports the short-run ineffectiveness of anticipated and unanticipated fiscal policy, in contrast to other empirical research, but ...
Working Paper
Does exchange rate appreciation 'deindustrialize' the open economy? a critique of U.S. evidence
Since the fiscal expansion and real appreciation of the dollar in the early 1980s, widespread attention has focused on the so-called "deindustrialization" and "two-tiered" development of the U.S. economy. This view argues that exchange rate appreciation caused a major resource shift away from tradables production, such as manufactures, toward nontradables production in the economy. In this paper we take a critical look at this view. ; We argue that the association of a dollar appreciation with relative strength or weakness in the tradable goods sector depends on the particular shock ...