Citation

Discussion Paper Details

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Title: Poole Revisited

Author(s): Fabrice Collard, Harris Dellas and Guy Ertz

Publication Date: August 2000

Keyword(s): Central Bank Operating Procedures, Interest Targeting, Macroeconomic Stability, Monetary Policy And Welfare and Money Targeting

Programme Area(s): International Macroeconomics

Abstract: We study the properties of alternative central bank targeting procedures in a general equilibrium monetary model of the US economy with labour contracts, endogenous velocity and three shocks: money demand, supply and fiscal. Money demand -velocity- shocks emerge as the main sources of macroeconomic volatility. Consequently, nominal interest rate targeting results in greater stability than money targeting. Interestingly this holds independently of the type of the shock (unlike Poole). Interest rate targeting also generates a higher level of welfare.

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Bibliographic Reference

Collard, F, Dellas, H and Ertz, G. 2000. 'Poole Revisited'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=2521