The timeliness of the effects of monetary policy: the new evidence from econometric models
The usefulness of monetary policy for smoothing out cyclical movements or keeping the economy on its desired growth path has long been a matter of debate. In the past, monetary policy was often condemned as being ineffectual. More recently, discretionary monetary policy has been condemned on the gro...
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| Format: | Article |
| Language: | English |
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Associazione Economia civile
2014-03-01
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| Series: | PSL Quarterly Review |
| Subjects: | |
| Online Access: | https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/11719 |
| _version_ | 1811172328326823936 |
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| author | W.H. WHITE |
| author_facet | W.H. WHITE |
| author_sort | W.H. WHITE |
| collection | DOAJ |
| description | The usefulness of monetary policy for smoothing out cyclical movements or keeping the economy on its desired growth path has long been a matter of debate. In the past, monetary policy was often condemned as being ineffectual. More recently, discretionary monetary policy has been condemned on the ground that its effects would be realised with an uncertain but long delay. Most recently, a number of elaborate econometric models have shown either little or no effect in monetary policy measures or important effects which are realised only after a long lag. The present article points out some flaws and misspecifications in these studies and argues that the evidence remains in favour of the case for sufficiently short lags in the effects of monetary policy. The author concludes that not only has the lag problem in the use of monetary policy been greatly exaggerated by some econometric studies, it also appears that the lag in the alternative fiscal policy has been underestimated.
JEL: E52, E62
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| first_indexed | 2024-04-10T17:28:09Z |
| format | Article |
| id | doaj.art-719c4eb26afd43b0a23b3de216840d7d |
| institution | Directory Open Access Journal |
| issn | 2037-3635 2037-3643 |
| language | English |
| last_indexed | 2024-04-10T17:28:09Z |
| publishDate | 2014-03-01 |
| publisher | Associazione Economia civile |
| record_format | Article |
| series | PSL Quarterly Review |
| spelling | doaj.art-719c4eb26afd43b0a23b3de216840d7d2023-02-03T16:51:18ZengAssociazione Economia civilePSL Quarterly Review2037-36352037-36432014-03-01218610.13133/2037-3643/11719The timeliness of the effects of monetary policy: the new evidence from econometric modelsW.H. WHITEThe usefulness of monetary policy for smoothing out cyclical movements or keeping the economy on its desired growth path has long been a matter of debate. In the past, monetary policy was often condemned as being ineffectual. More recently, discretionary monetary policy has been condemned on the ground that its effects would be realised with an uncertain but long delay. Most recently, a number of elaborate econometric models have shown either little or no effect in monetary policy measures or important effects which are realised only after a long lag. The present article points out some flaws and misspecifications in these studies and argues that the evidence remains in favour of the case for sufficiently short lags in the effects of monetary policy. The author concludes that not only has the lag problem in the use of monetary policy been greatly exaggerated by some econometric studies, it also appears that the lag in the alternative fiscal policy has been underestimated. JEL: E52, E62 https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/11719Monetary policycyclical movementseffectstime lagfiscal policy |
| spellingShingle | W.H. WHITE The timeliness of the effects of monetary policy: the new evidence from econometric models PSL Quarterly Review Monetary policy cyclical movements effects time lag fiscal policy |
| title | The timeliness of the effects of monetary policy: the new evidence from econometric models |
| title_full | The timeliness of the effects of monetary policy: the new evidence from econometric models |
| title_fullStr | The timeliness of the effects of monetary policy: the new evidence from econometric models |
| title_full_unstemmed | The timeliness of the effects of monetary policy: the new evidence from econometric models |
| title_short | The timeliness of the effects of monetary policy: the new evidence from econometric models |
| title_sort | timeliness of the effects of monetary policy the new evidence from econometric models |
| topic | Monetary policy cyclical movements effects time lag fiscal policy |
| url | https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/11719 |
| work_keys_str_mv | AT whwhite thetimelinessoftheeffectsofmonetarypolicythenewevidencefromeconometricmodels AT whwhite timelinessoftheeffectsofmonetarypolicythenewevidencefromeconometricmodels |