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A weekly perfect foresight model of the nonborrowed reserve operating procedure

Author

Listed:
  • Gary S. Anderson
  • Marvin Goodfriend
  • Anil K. Kashyap
  • George R. Moore
  • Richard D. Porter

Abstract

Of the many studies analyzing the Federal Reserve's post-October 6, 1979 nonborrowed reserve (NBR) operating procedure, none has focused upon weekly money market dynamics under rational expectations. This paper employs the rational expectations assumption in an explicit institutional model of the NBR procedure. The paper is positive rather than normative, isolating the policy elements that comprise the procedure and investigating their dynamic interaction.

Suggested Citation

  • Gary S. Anderson & Marvin Goodfriend & Anil K. Kashyap & George R. Moore & Richard D. Porter, 1984. "A weekly perfect foresight model of the nonborrowed reserve operating procedure," Working Paper 84-04, Federal Reserve Bank of Richmond.
    • Handle: RePEc:fip:fedrwp:84-04
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    References listed on IDEAS

    as
    1. Carl E. Walsh, 1982. "The effects of alternative operating procedures on economic and financial relationships," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 133-180.
    2. Anderson, Richard G & Rasche, Robert H, 1982. "What Do Money Market Models Tell Us about How to Implement Monetary Policy?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 14(4), pages 796-828, November.
    3. Axilrod, Stephen H & Lindsey, David E, 1981. "Federal Reserve System Implementation of Monetary Policy: Analytical Foundations of the New Approach," American Economic Review, American Economic Association, vol. 71(2), pages 246-252, May.
    4. Lindsey, David E. & Farrx, Helen T. & Gillum, Gary P. & Kopecky, Kenneth J. & Porter, Richard D., 1984. "Short-run monetary control : Evidence under a non-borrowed reserve operating procedure," Journal of Monetary Economics, Elsevier, vol. 13(1), pages 87-111, January.
    5. Farr, Helen T & Porter, Richard D, 1982. "Comment on "What Do Money Market Models Tell Us about How to Implement Monetary Policy?"," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 14(4), pages 857-868, November.
    6. Tinsley, P. A. & von zur Muehlen, P. & Fries, G., 1982. "The short-run volatility of money stock targeting," Journal of Monetary Economics, Elsevier, vol. 10(2), pages 215-237.
    7. Judd, John P & Scadding, John L, 1982. "Comment on "What Do Money Market Models Tell Us about How to Implement Monetary Policy?"," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 14(4), pages 868-877, November.
    8. Bryant, Ralph C, 1982. "Federal Reserve Control of the Money Stock," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 14(4), pages 597-625, November.
    9. Santomero, Anthony M, 1983. "Controlling Monetary Aggregates: The Discount Window," Journal of Finance, American Finance Association, vol. 38(3), pages 827-843, June.
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    Citations

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    Cited by:

    1. Robert L. Hetzel, 1986. "Monetary policy in the early 1980s," Economic Review, Federal Reserve Bank of Richmond, vol. 72(Mar), pages 20-32.
    2. Robert H. Rasche, 1985. "Interest rate volatility and alternative monetary control procedure," Economic Review, Federal Reserve Bank of San Francisco, issue Sum, pages 46-63.
    3. Nicola Acocella, "undated". "Teoria e pratica della politica economica: l’eredità del recente passato," Working Papers 104/13, Sapienza University of Rome, Metodi e Modelli per l'Economia, il Territorio e la Finanza MEMOTEF.
    4. Robert B. Avery & Myron L. Kwast, 1993. "Money and interest rates under a reserves operating target," Economic Review, Federal Reserve Bank of Cleveland, vol. 29(Q II), pages 24-34.
    5. Joseph G. Haubrich & Paul Wachtel, 1993. "Capital requirements and shifts in commercial bank portfolios," Economic Review, Federal Reserve Bank of Cleveland, vol. 29(Q III), pages 2-15.
    6. Timothy Q. Cook, 1989. "Determinants of the federal funds rate: 1979-1982," Economic Review, Federal Reserve Bank of Richmond, vol. 75(Jan), pages 3-19.
    7. Timothy Q. Cook, 1988. "Determinants of the Federal funds rate: 1979 - 1982," Working Paper 88-07, Federal Reserve Bank of Richmond.
    8. Tabellini, Guido, 1987. "Secrecy of Monetary Policy and the Variability of Interest Rates," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 19(4), pages 425-436, November.

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