Bernanke erinnerte gestern nochmal an die unkonventionellenMöglichkeiten der FED

verfasst von CRASH_GURU, 05.01.2004, 08:00

-->In thinking about the costs associated with a low overnight rate, one should bear in mind the message of Milton Friedman's classic essay on the optimal quantity of money (Friedman, 1969). Friedman argued that an overnight interest rate of zero is optimal, because a zero opportunity cost of liquidity eliminates the socially wasteful use of resources to economize on money balances. From this perspective, the costs of low short-term interest rates can be seen largely as adjustment costs, arising from the unwinding of schemes designed to make holding transactions balances less burdensome. These costs are real but are also largely transitory and have limited sectoral impact. Moreover, to the extent that the affected institutions have economic functions other than helping clients economize on money balances (for example, if some money market mutual funds have a comparative advantage in lending to commercial paper issuers), there is scope for repricing that will allow these services to continue to be offered. Thus t
here seems to be little reason for central banks to avoid bringing the policy rate close to zero if the economic situation warranted.

A quite different argument for engaging in alternative monetary policies before lowering the overnight rate all the way to zero is that the public might interpret a zero instrument rate as evidence that the central bank has"run out of ammunition." That is, low rates risk fostering the misimpression that monetary policy is ineffective. As we have stressed, that would indeed be a misimpression, as the central bank has means of providing monetary stimulus other than the conventional measure of lowering the overnight nominal interest rate. However, it is also true that the considerable uncertainty that surrounds the use of these alternative measures does make the calibration of policy actions more difficult. Moreover, given the important role for expectations in making many of these policies work, the communications challenges would be considerable. Given these risks, policymakers are well advised to act preemptively and aggressively to avoid facing the complications raised by the zero lower bound.

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gesamter Thread:

• Bernanke erinnerte gestern nochmal an die unkonventionellenMöglichkeiten der FED - CRASH_GURU, 05.01.2004, 08:00
  • Re: Bernanke erinnerte gestern nochmal an die unkonventionellenMöglichkeiten der FED - kizkalesi, 05.01.2004, 08:36
    • Re:...und Greenspan hält den Zins-Hammer ständig in der Hand - trotz Wahljahr - kizkalesi, 05.01.2004, 08:41
    • Re: Bernanke erinnerte gestern nochmal an die unkonventionellenMöglichkeiten der FED - CRASH_GURU, 05.01.2004, 17:58
      • Kids, paßt bloß in der Schule auf, ich bin hier wieder der Depp - LenzHannover, 05.01.2004, 22:37