E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit

• Term Structure Transmission of Monetary Policy

  Staff Working Paper 2007-30 Sharon Kozicki, P. A. Tinsley

  Under bond-rate transmission of monetary policy, the authors show that a generalized Taylor Principle applies, in which the average anticipated path of policy responses to inflation is subject to a lower bound of unity. This result helps explain how bond rates may exhibit stable responses to inflation, even in periods of passive policy.

  Content Type(s): Staff research, Staff working papers Topic(s): Interest rates, Monetary policy transmission JEL Code(s): E, E3, E5, N, N1

• Modelling Payments Systems: A Review of the Literature

  Staff Working Paper 2007-28 Jonathan Chiu, Alexandra Lai

  Payments systems play a fundamental role in an economy by providing the mechanisms through which payments arising from transactions can be settled. The existing literature on the economics of payments systems is large but loosely organized, in that each model uses a distinct set-up and sometimes a distinct equilibrium concept.

  Content Type(s): Staff research, Staff working papers Topic(s): Payment clearing and settlement systems JEL Code(s): E, E4, E42, E5, E58, G, G2, G21

• Optimal Monetary Policy and Price Stability Over the Long-Run

  Staff Working Paper 2007-26 Oleksiy Kryvtsov, Malik Shukayev, Alexander Ueberfeldt

  This paper examines the role of monetary policy in an environment with aggregate risk and incomplete markets. In a two-period overlapping-generations model with aggregate uncertainty and nominal bonds, optimal monetary policy attains the ex-ante Pareto optimal allocation.

  Content Type(s): Staff research, Staff working papers Topic(s): Monetary policy framework JEL Code(s): E, E5