【正文】 FIGURE 3 Result of Targeting on Nonborrowed Reserves Copyright 169。 2020 Pearson AddisonWesley. All rights reserved. 1631 Early Keynesian Evidence ? Moary policy does not matter at all ? Three pieces of structural model evidence – Low interest rates during the Great Depression indicated expansionary moary policy but had no effect on the economy – Empirical studies found no linkage between movement in nominal interest rates and investment spending – Surveys of business people confirmed that investment in physical capital was not based on market interest rates Copyright 169。 2020 Pearson AddisonWesley. All rights reserved. 1643 Lessons for Moary Policy ? It is dangerous always to associate the easing or the tightening of moary policy with a fall or a rise in shortterm nominal interest rates ? Other asset prices besides those on shortterm debt instruments contain important information about the stance of moary policy because they are important elements in various moary policy transmission mechanisms Copyright 169。 2020 Pearson AddisonWesley. All rights reserved. 1627 Structural Model ? Examines whether one variable affects another by using data to build a model that explains the channels through which the variable affects the other ? Transmission mechanism – The change in the money supply affects interest rates – Interest rates affect investment spending – Investment spending is a ponent of aggregate spending (output) Copyright 169。 2020 Pearson AddisonWesley. All rights reserved. 1611 Moary Policy with an Implicit Nominal Anchor II ? Advantages – Uses many sources of information – Avoids timeinconsistency problem – Demonstrated success ? Disadvantages – Lack of transparency and accountability – Strong dependence on the preferences, skills, and trustworthiness of individuals in charge – Inconsistent with democratic principles Copyright 169。 2020 Pearson AddisonWesley. All rights reserved. 164 Moary Targeting III ? Germany – The Bundesbank focused on “central bank money” in the early 1970s. – A moary targeting regime can restrain inflation in the longer run, even when targets are missed. – The reason of the relative success despite missing targets relies on clearly stated moary policy objectives and central bank engagement in munication with the public. Copyright 169。 2020 Pearson AddisonWesley. All rights reserved. 1620 Central Bank’s Response to Asset Price Bubbles: Lessons From the Subprime Crisis ? Should central banks respond to bubbles? – Strong argument for not responding to bubbles driven by irrational exuberance – Bubbles are easier to identify when asset prices and credit are increasing rapidly at the same time. – Moary policy should not be used to prick bubbles. Copyright 169。 2020 Pearson AddisonWesley. All rights reserved. 1636 Statistical Evidence ? Autonomous expenditure variable (A) equal to investment spending plus government spending – For Keynesian model A should be highly correlated with aggregate spending but money supply should not – For Moarist money supply should be highly correlated with aggregate spending but A sh