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May/June 1995

Channels of Monetary Policy

Posted 1995-05-01

Editor's Introduction: Channels of Policy Proceedings of the Nineteenth Annual Economic Policy Conference

by Daniel L. Thornton and David C. Wheelock

Posted 1995-05-01

Theoretical Issues of Liquidity Effects

by Lee E. Ohanian and Alan C. Stockman

Lee E. Ohanian and Alan C. Stockman define the liquidity effect as “the purported statistical relation between expansion of bank reserves or a monetary aggregate and short-run reductions in short-term interest rates.” Ohanian and Stockman then explore the liquidity effect in general equilibrium, representative-agent models.

Posted 1995-05-01

Commentary on "Theoretical Issues of Liquidity Effects"

by Kevin D. Hoover

Posted 1995-05-01

Resolving the Liquidity Effect

by Adrian R. Pagan and John C. Robertson

The article by Adrian R. Pagan and John C.  Robertson narrows the disagreement about the empirical relevance of the liquidity effect. Pagan and Robertson thoroughly review the empirical literature on the liquidity effect, differentiating between single-equation and systems-modeling approaches.

Posted 1995-05-01

Commentary on "Resolving the Liquidity Effect"

by Lawrence J. Christiano

Posted 1995-05-01

Is There a "Credit Channel" for Monetary Policy?

by R. Glenn Hubbard

The author surveys the credit channel for monetary policy. He makes clear that there are two possible credit channels for monetary policy, and that both require asymmetry in the access of “small” and “large” firms to credit. The bank credit channel operates directly on the ability of depository institutions to make loans through the effect of monetary policy actions (open market operations) on bank reserves.

Posted 1995-05-01

Commentary on "Is There a 'Credit Channel' for Monetary Policy?"

by Bruce D. Smith

Posted 1995-05-01

Distinguishing Theories of the Monetary Transmission Mechanism

by Stephen G. Cecchetti

The author surveys the credit channel for monetary policy. He makes clear that there are two possible credit channels for monetary policy, and that both require asymmetry in the access of “small” and “large” firms to credit.

Posted 1995-05-01

Commentary on "Distinguishing Theories of the Monetary Transmission Mechanism"

by Mark Gertler

Posted 1995-05-01

Information, Sticky Prices and Macroeconomic Foundations

by Allan H. Meltzer

Allan Meltzer proposes that sluggish price adjustment is necessary for monetary policy to have real effects. Meltzer’s purpose is to provide microeconomic foundations for price setting and the gradual adjustment of prices to new information.

Posted 1995-05-01

Commentary on "Information, Sticky Prices and Macroeconomic Foundations"

by Randall Wright

Posted 1995-05-01

Reply to Wright

by Allan H. Meltzer

Allan H. Meltzer replies to Randall Wright's commentary. 

Posted 1995-05-01

A Conference Panel Discussion

by Ben S. Bernanke, Thomas F. Cooley, and Manfred J.M. Neumann

Ben Bernanke, Thomas Cooley, and Manfred Neumann each take a different approach to summarizing the profession’s understanding of the effects of monetary policy in this conference panel discussion, "What Do We Know About How Monetary Policy Affects the Economy?"


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