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Journal Article
Monetary policy actions and long-term interest rates
It is generally believed that monetary policy actions are transmitted to the economy through their effect on market interest rates. According to this standard view, a restrictive monetary policy by the Federal Reserve pushes up both short-term and long-term interest rates, leading to less spending by interest-sensitive sectors of the economy such as housing, consumer durable goods, and business fixed investment. Conversely, an easier policy results in lower interest rates that stimulate economic activity. Unfortunately, empirical studies and the observed behavior of interest rates appear to ...
Journal Article
Monetary policy without reserve requirements: analytical issues
Reserve requirements have traditionally been viewed as a key instrument of monetary policy. Indeed, textbook discussions of monetary policy typically center on the role of reserve requirements in determining the size of the money multiplier and the magnitude of bank credit expansion. In recent years, however, there has been a significant decline in the use of reserve requirements in the United States and in other industrialized countries. Many countries have made substantial cuts in the level of reserve requirements, and some countries have eliminated reserve requirements altogether.> The ...
Journal Article
The discount window : time for reform?
For many years, the Federal Reserve's discount window has played an important role in monetary policy. Discount window borrowing helps individual depository institutions manage their reserve accounts in the presence of unexpected deposit and payments flows. Improved reserve management, in turn, helps stabilize the overnight federal funds market by reducing the volatility of short-term interest rates. Moreover, announced changes in the Federal Reserve's discount rate have often signaled important shifts in the stance of monetary policy and have frequently been associated with large changes in ...
Journal Article
Monetary targets and inflation: the Canadian experience
Journal Article
The role of extended credit in Federal Reserve discount policy
Journal Article
New challenges for monetary policy : a summary of the Bank's 1999 Symposium
After two decades of successfully restoring price stability in much of the world economy, central banks begin the next millennium facing a new set of challenges. One key task is how to conduct monetary policy in an era of price stability. Clearly, policymakers would like inflation to remain subdued. But how should monetary policy procedures be designed to ensure that inflation does not reappear as a serious policy problem? Another important question is whether central banks enjoy greater operational flexibility or face new constraints in an environment of low inflation. And recent crises in ...
Journal Article
Daylight overdrafts, payments system risk, and public policy