IMF高级宏观经济学研修班课程CT1405MMF-L03Moneta

MonetaryPolicyTransmissionMechanismCTPTrainingProgramMacroeconomicManagementandFinancialSectorIssuesCT14.05PresenterTaoWuContentOutline•GeneralIssuesaboutMonetaryPolicyObjectives:Whatmonetarypolicycanandcannotdo.Choiceofpolicyinstruments:directorindirect?Choiceofoperatingtarget:interestrateormonetaryaggregates?•TransmissionMechanism:Howdoesmonetarypolicywork?Interestrate,Credit,Assetprice,Exchangerate•RecentMonetaryPolicyIssues:TheU.S.FederalReserve’sUnconventionalMonetaryPolicyOperations2ThistrainingmaterialisthepropertyoftheInternationalMonetaryFund(IMF)andisintendedforuseinIMFInstitutecourses.AnyreuserequiresthepermissionoftheIMFInstitute.”WhatMonetaryPolicyCanandCannotDoWhatMonetaryPolicyCanandCannotDo“Weareindangerofassigningtomonetarypolicyalargerrolethanitcanperform,indangerofaskingittoaccomplishtasksthatitcannotachieve,and,asaresult,indangerofpreventingitfrommakingthecontributionthatitiscapableofmaking.””—PresidentialaddressofMiltonFriedmanatthe80thAnnualMeetingoftheAmericanEconomicAssociation,1967.WhatMonetaryPolicyCanandCannotDo•Long-runeffectsvs.Short-runeffectsMonetarypolicymaybeeffectiveinshortrun,butitseffectsindeterminingtherealeconomicgrowthoremploymentinlongrunarealmostnegligible.•Thebestwayformonetarypolicytopromotelong-runeconomicgrowthistoensurepricestability.Pricingsystemworksmoreefficientlytoallocateresourceswhenpricesareonaveragestable;Toavoiddistortionscausedbytheinteractionofinflationandataxsystembasedontheassumptionthatpricesarestable.WhatMonetaryPolicyCanandCannotDo•Centralbankscannothaveanysubstantialeffectontrendgrowthinoutputortrendgrowthinemployment.policiesbygovernmentthatcanhaveamaterialinfluenceonboth:education,humancapital,technologicalinnovations,taxation,protectionofprivatepropertyrights,etc.•However,bykeepinginflationlowandstable,centralbankscanoperatemonetarypolicywiththeobjectiveofkeepingactualoutputandemploymentascloseaspossibletothetrendofpotentialoutputandemployment.MonetaryPolicy:Objectives•PriceStability(lowandstableinflation);•ReducedVolatilityofbusinesscycles;•CentralbanksmayalsobeconcernedaboutInterestratestabilityandfinancialmarketstability;Exchangeratestability.MonetaryPolicy:Objectives•Whatdowemeanbypricestability?•Pricesarenotchangingonaverage.However,individualpricesmayriseorfall.•Whynotzeropercentinflation?UpwardbiasinmeasuredinflationReducetheriskofdeflation(toavoida“liquiditytrap”–zeroboundonnominalinterestrates).TimeGDPCentralBankmayalsobeabletoreducevolatilityofbusinesscyclesWhatMonetaryPolicyCannotDo:LessonsfromthePhillipsCurve•Isthereatrade-offbetweeninflationandunemployment?•ThePhillipscurve:WilliamsPhillips(1958),using97yearsoftheU.K.data,showedatradeoffbetweenunemploymentandnominalwagegrowth.DatafortheUSupto1969showedthesame.Whathappensifacentralbanktriestoexploitcontinuouslytheshort-runtrade-offandwantstopersistentlypushtheunemploymentratebelowitspotentiallevel?PhillipsCurveintheU.S.:1960-20070246810121416024681012UnemploymentRateCPIInflation1960s1970s1980s1990s2000sTrade-offsbetweenInflationandUnemployment•Forinstance,acentralbankmaydecidetoincreasemoneysupplyorkeepinterestrateslow,therebypushesunemploymentratebelowitspotentiallevelatthepriceofahigherinflation,thusthereseemstobeatrade-offinshortrun.•However,inflationsurprisescannotstimulateshort-termemploymentveryoften.•Inthelongrun,economicagentswilladjusttheirinflationexpectationsaccordingly.Therefore,discretionarypolicieswillmostlikelyendupwithhigherinflationbutnolowerunemployment.Trade-offsbetweentheVolatilitiesofInflationandUnemployment•Assumethattheobjectiveofacentralbankistominimizewhereisthetargetunemploymentrate;isthetargetinflationrate;istheinflation-aversionparameter.•Centralbankscantrademoreunemploymentoroutputvolatilityforlessinflationvolatility,andviceversa.2*2*)()(uuL*u*InstrumentsofMonetaryPolicy15OperatingTargets(reserves,moneymarketinterestrate,etc)IndicatorvariablesIntermediateTargets(M2,ER,LTinterestrates,Inflationforecast,etc)PolicyObjectives(lowandstableinflation)MonetaryPolicyFrameworkPolicyInstruments(OMO,discountrate,etc)DomesticshocksExternalshocksInflationTargetingPolicyDecisionMonetaryPolicyFrameworkNeedtoanswerthreequestionswhendesigningamonetarypolicyframework:•Whichpolicyinstrumentstouse?Directinstrumentsvs.indirectinstruments?•Whatistheoperatingtargetvariable?Targetingprices(interestrates)orquantities(moneysupply,credit)?•Whatisthemonetarypolicytransmissionmechanism?Howdoespolicyactionsonoperatingtargettransmittointermediatetargetandthenpolicyobjectives?Howaccurateandhowfastisthetransmission?Choicesbetweenpolicyinstruments,intermediatetargets,andfinalobjectivesmustbecompatible.PolicyInstruments•Whenimplementingmonetarypolicy,centralbankscaneitheractdirectly,usingitsregulatorypower,orindirectly,usingitsinfluenceonmoneymarketconditions.DirectinstrumentsoperatebysettingorlimitingeitherpricesorquantitiesthroughregulationsFocusonthebalancesheetsofcommercialbanks;Indirectinstrumentsactthroughthemarket,byadjustingtheunderlyingdemandfor,an