Handbook of Monetary Economics 3A

INTRODUCTION TO THE SERIES

CONTRIBUTORS

PREFACE

Part One: Foundations: The Role of Money in the Economy

Chapter 1: The Mechanism-Design Approach to Monetary Theory

Abstract

1 INTRODUCTION

2 SOME FRICTIONS

3 AN ILLUSTRATIVE MODEL WITH PERFECT RECOGNIZABILITY

4 IMPERFECT RECOGNIZABILITY AND UNIFORM CURRENCY

5 OPTIMA UNDER A UNIFORM OUTSIDE CURRENCY

6 EXTENSIONS OF THE ILLUSTRATIVE MODEL

7 CONCLUDING REMARKS

Chapter 2: New Monetarist Economics: Models

Abstract

1 INTRODUCTION

2 BASIC MONETARY THEORY

3 A BENCHMARK MODEL

4 NEW MODELS OF OLD IDEAS

5 MONEY, PAYMENTS, AND BANKING

6 FINANCE

7 CONCLUSION

Chapter 3: Money and Inflation: Some Critical Issues

Abstract

1 INTRODUCTION

2 THE QUANTITY THEORY OF MONEY

3 RELATED CONCEPTS

4 HISTORICAL BEHAVIOR OF MONETARY AGGREGATES

5 FLAWED EVIDENCE ON MONEY GROWTH-INFLATION RELATIONS

6 MONEY GROWTH AND INFLATION IN TIME SERIES DATA

7 IMPLICATIONS OF A DIMINISHING ROLE FOR MONEY

8 MONEY VERSUS INTEREST RATES IN PRICE LEVEL ANALYSIS

9 CONCLUSIONS

APPENDIX: DATA SOURCES

Part Two: Foundations: Information and Adjustment

Chapter 4: Rational Inattention and Monetary Economics

Abstract

1 MOTIVATION

2 INFORMATION THEORY

3 INFORMATION THEORY AND ECONOMIC BEHAVIOR

4 IMPLICATIONS FOR MACROECONOMIC MODELING

5 IMPLICATIONS FOR MONETARY POLICY

6 DIRECTIONS FOR PROGRESS

7 CONCLUSION

APPENDIX

Chapter 5: Imperfect Information and Aggregate Supply

Abstract

1 INTRODUCTION

2 THE BASELINE MODEL OF AGGREGATE SUPPLY

3 FOUNDATIONS OF IMPERFECT-INFORMATION AND AGGREGATE-SUPPLY MODELS

4 PARTIAL AND DELAYED INFORMATION MODELS: COMMON PREDICTIONS

5 PARTIAL AND DELAYED INFORMATION MODELS: NOVEL PREDICTIONS

6 MICROFOUNDATIONS OF INCOMPLETE INFORMATION

7 THE RESEARCH FRONTIER

8 CONCLUSION

Chapter 6: Microeconomic Evidence on Price-Setting

Abstract

1 INTRODUCTION

2 DATA SOURCES

3 FREQUENCY OF PRICE CHANGES

4 SIZE OF PRICE CHANGES

5 DYNAMIC FEATURES OF PRICE CHANGES

6 TEN FACTS AND IMPLICATIONS FOR MACRO MODELS

7 CONCLUSION

Part Three: Models of the Monetary Transmission Mechanism

Chapter 7: DSGE Models for Monetary Policy Analysis

Abstract

1 INTRODUCTION

2 SIMPLE MODEL

3 SIMPLE MODEL: SOME IMPLICATIONS FOR MONETARY POLICY

4 MEDIUM-SIZED DSGE MODEL

5 ESTIMATION STRATEGY

6 MEDIUM-SIZED DSGE MODEL: RESULTS

7 CONCLUSION

Chapter 8: How Has the Monetary Transmission Mechanism Evolved Over Time?

Abstract

1 INTRODUCTION

2 THE CHANNELS OF MONETARY TRANSMISSION

3 WHY THE MONETARY TRANSMISSION MECHANISM MAY HAVE CHANGED

4 HAS THE EFFECT OF MONETARY POLICY ON THE ECONOMY CHANGED? AGGREGATE EVIDENCE

5 WHAT CAUSED THE MONETARY TRANSMISSION MECHANISM TO EVOLVE?

6 IMPLICATIONS FOR THE FUTURE CONDUCT OF MONETARY POLICY

APPENDIX

Chapter 9: Inflation Persistence

Abstract

1 INTRODUCTION

2 DEFINING AND MEASURING REDUCED-FORM INFLATION PERSISTENCE

3 STRUCTURAL SOURCES OF PERSISTENCE

4 INFERENCE ABOUT PERSISTENCE IN SMALL SAMPLES: “ANCHORED EXPECTATIONS” AND THEIR IMPLICATIONS FOR INFLATION PERSISTENCE

5 MICROECONOMIC EVIDENCE ON PERSISTENCE

6 CONCLUSIONS

Chapter 10: Monetary Policy and Unemployment

Abstract

1 INTRODUCTION

2 EVIDENCE ON THE CYCLICAL BEHAVIOR OF LABOR MARKET VARIABLES AND INFLATION

3 A MODEL WITH NOMINAL RIGIDITIES AND LABOR MARKET FRICTIONS

4 EQUILIBRIUM DYNAMICS: THE EFFECTS OF MONETARY POLICY AND TECHNOLOGY SHOCKS

5 LABOR MARKET FRICTIONS, NOMINAL RIGIDITIES AND MONETARY POLICY DESIGN

6 POSSIBLE EXTENSIONS

7 CONCLUSIONS

APPENDIX 1

APPENDIX 2

APPENDIX 3

APPENDIX 4

Chapter 11: Financial Intermediation and Credit Policy in Business Cycle Analysis

Abstract

1 INTRODUCTION

2 A CANONICAL MODEL OF FINANCIAL INTERMEDIATION AND BUSINESS FLUCTUATIONS

3 CREDIT POLICIES

4 CRISIS SIMULATIONS AND POLICY EXPERIMENTS

5 ISSUES AND EXTENSIONS

6 CONCLUDING REMARKS

APPENDIX 1

APPENDIX 2

Chapter 12: Financial Intermediaries and Monetary Economics

Abstract

1 INTRODUCTION

2 FINANCIAL INTERMEDIARIES AND THE PRICE OF RISK

3 CHANGING NATURE OF FINANCIAL INTERMEDIATION

4 EMPIRICAL RELEVANCE OF FINANCIAL INTERMEDIARY BALANCE SHEETS

5 CENTRAL BANK AS LENDER OF LAST RESORT

6 ROLE OF SHORT-TERM INTEREST RATES

7 CONCLUDING REMARKS

APPENDIX

INDEX-VOLUME 3A

INDEX-VOLUME 3B