LEADER 05706oam 22013814 450 001 9910809280903321 005 20240410162439.0 010 $a1-4623-6796-8 010 $a1-4527-8747-6 010 $a1-282-58659-9 010 $a9786613822536 010 $a1-4519-9219-X 035 $a(CKB)3360000000443288 035 $a(EBL)3014376 035 $a(SSID)ssj0000940059 035 $a(PQKBManifestationID)11553618 035 $a(PQKBTitleCode)TC0000940059 035 $a(PQKBWorkID)10946752 035 $a(PQKB)10760485 035 $a(OCoLC)698585615 035 $a(IMF)WPIEE2006200 035 $a(MiAaPQ)EBC3014376 035 $a(EXLCZ)993360000000443288 100 $a20020129d2006 uf 0 101 0 $aeng 135 $aur|n|---||||| 181 $ctxt 182 $cc 183 $acr 200 10$aAsset Market Participation, Monetary Policy Rules, and the Great Inflation /$fFlorin Bilbiie, Roland Straub 205 $a1st ed. 210 1$aWashington, D.C. :$cInternational Monetary Fund,$d2006. 215 $a1 online resource (34 p.) 225 1 $aIMF Working Papers 300 $a"September 2006". 311 $a1-4518-6460-4 320 $aIncludes bibliographical references. 327 $a""Contents""; ""I. Introduction""; ""II. Limited Asset Market Participation and Monetary Policy: Some Theory""; ""III. Empirical Evidence""; ""IV. Change in Structure of Economy or in Distribution of Shocks?""; ""V. Conclusions""; ""General Model"" 330 3 $aThis paper argues that limited asset market participation is crucial in explaining U.S. macroeconomic performance and monetary policy before the 1980s, and their changes thereafter. We develop an otherwise standard sticky-price dynamic stochastic general equilibrium model, which implies that at low asset-market participation rates, the interest rate elasticity of output (the slope of the IS curve) becomes positive - that is, "non-Keynesian." Remarkably, in that case, a passive monetary policy rule ensures equilibrium determinacy and maximizes welfare. Consequently, we argue that the policy of the Federal Reserve System in the pre-Volcker era, often associated with a passive monetary policy rule, was closer to optimal than conventional wisdom suggests and may thus have remained unchanged at a fundamental level thereafter. We provide institutional and empirical evidence for our hypothesis, in the latter case using Bayesian estimation techniques, and show that our model is able to explain most features of the "Great Inflation.". 410 0$aIMF Working Papers; Working Paper ;$vNo. 2006/200 606 $aInflation (Finance) 606 $aMonetary policy 606 $aBanks and Banking$2imf 606 $aFinance: General$2imf 606 $aInflation$2imf 606 $aMacroeconomics$2imf 606 $aPrice Level$2imf 606 $aDeflation$2imf 606 $aBusiness Fluctuations$2imf 606 $aCycles$2imf 606 $aFinancial Markets and the Macroeconomy$2imf 606 $aMonetary Policy$2imf 606 $aCentral Banks and Their Policies$2imf 606 $aStudies of Particular Policy Episodes$2imf 606 $aEconomic History: Macroeconomics$2imf 606 $aGrowth and Fluctuations: U.S$2imf 606 $aCanada: 1913-$2imf 606 $aEconomic History: Financial Markets and Institutions: U.S$2imf 606 $aGeneral Financial Markets: General (includes Measurement and Data)$2imf 606 $aMacroeconomics: Consumption$2imf 606 $aSaving$2imf 606 $aWealth$2imf 606 $aInterest Rates: Determination, Term Structure, and Effects$2imf 606 $aFinance$2imf 606 $aSecurities markets$2imf 606 $aConsumption$2imf 606 $aHyperinflation$2imf 606 $aReal interest rates$2imf 606 $aFinancial markets$2imf 606 $aPrices$2imf 606 $aNational accounts$2imf 606 $aFinancial services$2imf 606 $aCapital market$2imf 606 $aEconomics$2imf 606 $aInterest rates$2imf 607 $aUnited States$2imf 615 0$aInflation (Finance) 615 0$aMonetary policy. 615 7$aBanks and Banking 615 7$aFinance: General 615 7$aInflation 615 7$aMacroeconomics 615 7$aPrice Level 615 7$aDeflation 615 7$aBusiness Fluctuations 615 7$aCycles 615 7$aFinancial Markets and the Macroeconomy 615 7$aMonetary Policy 615 7$aCentral Banks and Their Policies 615 7$aStudies of Particular Policy Episodes 615 7$aEconomic History: Macroeconomics 615 7$aGrowth and Fluctuations: U.S. 615 7$aCanada: 1913- 615 7$aEconomic History: Financial Markets and Institutions: U.S. 615 7$aGeneral Financial Markets: General (includes Measurement and Data) 615 7$aMacroeconomics: Consumption 615 7$aSaving 615 7$aWealth 615 7$aInterest Rates: Determination, Term Structure, and Effects 615 7$aFinance 615 7$aSecurities markets 615 7$aConsumption 615 7$aHyperinflation 615 7$aReal interest rates 615 7$aFinancial markets 615 7$aPrices 615 7$aNational accounts 615 7$aFinancial services 615 7$aCapital market 615 7$aEconomics 615 7$aInterest rates 700 $aBilbiie$b Florin$01630683 701 $aStraub$b Roland$01630684 801 0$bDcWaIMF 906 $aBOOK 912 $a9910809280903321 996 $aAsset Market Participation, Monetary Policy Rules, and the Great Inflation$93969122 997 $aUNINA