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BASE MONEY RULES IN THE UNITED KINGDOM
Author(s) -
HALDANE ANDREW G.,
McCALLUM BENNETT T.,
SALMON CHRIS
Publication year - 1996
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/j.1467-9957.1996.tb01452.x
Subject(s) - disclaimer , new england , citation , kingdom , law , sociology , economics , law and economics , political science , paleontology , politics , biology
The authors conduct counterfactual stochastic simulations of B. T. McCallum's monetary policy rule for the United Kingdom. This rule targets nominal GDP using the monetary base as its instrument. It is able to secure a dramatic improvement in inflation performance compared with historical outturns, at the same time imposing few countervailing costs, measured in terms of output or instrument instability. An example is given of how the rule might be used at an operational level in the setting of U.K. monetary policy. Copyright 1996 by Blackwell Publishers Ltd and The Victoria University of Manchester