Monetary Policy: Rules and Transmission Mechanisms

Descripción

Editors: Norman Loayza and Klaus Schmidt-Hebbel
Central Bank of Chile, 2002

Monetary policy must consider the bidirectional relationship between the economy and its central bank. It should therefore address two essential questions: first, how changes in the economy induce a reaction by the central bank, and second, how these policy changes are in turn transmitted to the economy.
The essays in this volume present and discuss some recent advances in research on monetary policy rules and monetary transmission mechanisms. In addressing these issues, the papers take a variety of approaches, from case studies on developed and emerging economies to cross-country empirical analyses, and from theoretical models to historical narrative. Together they clarify some key issues of monetary policy, such as the tradeoff between output and inflation volatilities, the importance of central bank credibility, the additional complexities of policymaking in open economies, and the limits that uncertainty places on policy decisions.

Blurbs

“This is a first-rate treatise on monetary policy in emerging countries. The contributors are first-rate academics and practitioners. They provide deep insights and rigorous analysis. This book is a must read for anyone interested in undertstanding the contribution of monetary policy to stability, growth and prosperity, Definitely, a home run!”
Sebastian Edwards, University of California, Los Angeles

“The achievement of low and stable rates of inflation worldwide has come hand in hand with a growing interest by central banks in the promotion and in-house production of high-level, policy-relevant research in monetary economics, as exemplified by the papers in the present volume. The Central Bank of Chile deserves high marks in both fronts”.
Jordi Galí, Universitat Pompeu Fabra

“This addition to a new series of volumes, representing the highly regarded annual conferences held by the Central bank of Chile, is most welcome. In it, leading academic and central bank analysts consider a wide variety of issues concerning the design of monetary policy rules, the specification of transmission mechanisms (i.e., macroeconomic structures), and the interaction of these. A notable feature is the inclusion of full quantitative studies for six different economies -Australia, Canada, Chile, Israel, South Africa, and the U.K. – plus informative policy-rule estimates for five Latin American economies”.
Benett t. McCallum, Carnegie Mellon University