Optimal choice of monetary policy instruments in a macroeconometric model
利用随机模拟和美国经济计量模型，考察货币政策工具的最优选择，发现常规模型支持利率作为主要工具，但若债券市场存在理性预期，则支持货币供应量。
This paper uses stochastic simulation and my U.S. econometric model to examine the optimal choice of monetary policy instruments. Are the variances, covariances, and parameters in the model such as to favor one instrument over the other, in particular the interest rate over the money supply? The results for the regular version of the model provide support for what seems to be the Fed's current choice of using the interest rate as its primary instrument. On the other hand, the results support the use of the money supply as the primary instrument if there are rational expectations in the bond market.