TY  - UNPD
A1  - Beck, Günter W.
A1  - Wieland, Volker
T1  - Money in monetary policy design under uncertainty: a formal characterization of ECB-style cross-checking
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2007,18
N2  - The European Central Bank has assigned a special role to money in its two pillar strategy and has received much criticism for this decision. The case against including money in the central bank’s interest rate rule is based on a standard model of the monetary transmission process that underlies many contributions to research on monetary policy in the last two decades. In this paper, we develop a justification for including money in the interest rate rule by allowing for imperfect knowledge regarding unobservables such as potential output and equilibrium interest rates. We formulate a novel characterization of ECB-style monetary cross-checking and show that it can generate substantial stabilization benefits in the event of persistent policy misperceptions regarding potential output. JEL Classification: E32, E41, E43, E52, E58
T3  - CFS working paper series - 2007, 18 
KW  - monetary policy
KW  - money
KW  - quantity theory
KW  - Phillips Curve
KW  - European Central Bank
KW  - policy under uncertainty
KW  - Europäische Zentralbank
KW  - Geldpolitik
Y1  - 2007
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/1095
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30-43991
N1  - 1st version: August 26, 2006 ; This version: September 15, 2006
IS  - Version: September 15, 2006
ER  -