THE RELATION BETWEEN NARRATIVE AND MONEY MARKET INDICATORS OF MONETARY POLICY
- 1 January 1995
- journal article
- Published by Wiley in Economic Inquiry
- Vol. 33 (1) , 24-44
- https://doi.org/10.1111/j.1465-7295.1995.tb01844.x
Abstract
This paper studies the relation between narrative‐based indicators of monetary policy and widely used money market indicators of monetary policy. Three principal findings emerge. First, changes in monetary policy, as measured by the narrative‐based policy indices, are associated with persistent changes in the levels of M2 and the monetary base. In contrast, changes in the narrative policy indicators lead to transitory changes in short‐term interest rates, nonborrowed reserves, and the spread between the six‐month commercial paper rate and the three‐month treasury bill rate. Third, these findings are generally robust across different narrative‐based policy indices.Keywords
This publication has 9 references indexed in Scilit:
- A Monetary History of the United States, 1867-1960Published by Walter de Gruyter GmbH ,2008
- How Important is the Credit Channel in the Transmission of Monetary Policy?Published by National Bureau of Economic Research ,1993
- Some Empirical Evidence on the Effects of Monetary Policy Shocks on Exchange RatesPublished by National Bureau of Economic Research ,1993
- Identification and the Liquidity Effect of a Monetary Policy ShockPublished by National Bureau of Economic Research ,1991
- The Objectives and Priorities of Monetary Policy under Different Federal Reserve ChairmenJournal of Money, Credit and Banking, 1990
- The effect of changes in the federal funds rate target on market interest rates in the 1970sJournal of Monetary Economics, 1989
- Does Monetary Policy Matter? Narrative Versus Structural ApproachesPublished by National Bureau of Economic Research ,1989
- Fed policy and presidential electionsJournal of Macroeconomics, 1985
- Policy Objectives of the Federal Reserve SystemThe Quarterly Journal of Economics, 1978