scholarly journals The Supply-Side Effects of Monetary Policy

2021 ◽  
Author(s):  
David Baqaee ◽  
Emmanuel Farhi ◽  
Kunal Sangani
Keyword(s):  
Monetary Policy ◽  
Side Effects ◽  
Supply Side

scholarly journals The Fiscal Reaction Function and the Transmission Mechanism for Pakistan

2007 ◽  
Vol 46 (4II) ◽  
pp. 435-447 ◽  
Author(s):  
Mahmood Khalid ◽  
Wasim Shahid Malik ◽  
Abdul Sattar
Keyword(s):  
Monetary Policy ◽  
Side Effects ◽  
Fiscal Policy ◽  
Supply And Demand ◽  
New Keynesian ◽  
Supply Side ◽  
Demand Side ◽  
Long Run ◽  
Short Run ◽  
Macro Variables

Modern macroeconomics literature emphasises both the short run and long run objectives of fiscal policy [Romer (2006)]. In the short run it can be used to counter output cyclicality and/or stabilise volatility in macro variables, which is descriptively same as of effects of the short run monetary policy. Further for the long-run, fiscal policy can also affect both the demand and supply side of the economy. But in most traditional analyses it is assumed that fiscal policy would adjust to ensure the intertemporal budget constraint to be satisfied, while monetary policy is free to adjust its instruments [‘Ricardian Regime’ by Sargent (1982)] such as stock of money supply or the nominal interest rate [Walsh (2003)]. The debt financing methods, expenditure and tax powers of fiscal authorities i.e. the fiscal policy has also been seen as to affect both the supply and demand side of the economy. As noted by Baxter and King (1993), the initial Real Business Cycle models had only the supply side effects of the fiscal policy, where these were transmitted through the wealth effect and labourleisure choices of the household. Recently also New-Keynesian type models with micro-foundations and sticky prices argue that still through the supply side fiscal policy management could be accorded for stabilisation [Linnemann and Schabert (2003)]. The demand side effects of the fiscal policy could also be found only with more imperfections such as ‘Rule of Thumb’ consumers or those with liquidity constraints, which lead to exclusion of Ricardian equivalence [Gali, et al. (2005)]. But all that depends on the structure of the economy, as Blanchard and Perotti (2002) stated:

Supply-side effects of monetary policy and equilibrium multiplicity

2003 ◽  
Vol 79 (2) ◽  
pp. 205-211 ◽  
Author(s):  
Matthias Brückner ◽  
Andreas Schabert
Keyword(s):  
Monetary Policy ◽  
Side Effects ◽  
Supply Side

scholarly journals The Supply-Side Effects of Monetary Policy

2021 ◽  
Author(s):  
David Baqaee ◽  
Robert B. Mendelson ◽  
Kunal Sangani
Keyword(s):  
Monetary Policy ◽  
Side Effects ◽  
Supply Side

Expansionary monetary policy and its side effects

2019 ◽  
Vol 60 (4) ◽  
pp. 61-73
Author(s):  
Jacek Tomkiewicz ◽  
Keyword(s):  
Monetary Policy ◽  
Side Effects

Interactive effects between monetary policy and fiscal policy based on dynamic stochastic general equilibrium model

2020 ◽  
pp. 1-12
Author(s):  
Ying Xie
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
General Equilibrium ◽  
Equilibrium Model ◽  
Control Policy ◽  
Dynamic Stochastic General Equilibrium ◽  
Economic Effects ◽  
Interactive Effects ◽  
Supply Side ◽  
Dynamic Stochastic

From the beginning to the end, monetary policy has focused too much on the control of the supply side. At present, the single supply-based monetary policy is ineffective. Therefore, it is urgent to change the current single direct supply-side regulation and control policy and replace it with a non-single and indirect control policy that combines supply and demand. Based on machine learning algorithms, this paper constructs a monetary policy analysis model based on dynamic stochastic general equilibrium methods to analyze the interactive effects of monetary policy and other policies. Moreover, this paper uses the dynamic stochastic general equilibrium model to simulate and analyze the economic effects of fiscal policy. In addition, this paper compares the economic effects of monetary policy and other policies and conducts verification and analysis through actual data. The obtained results show that the model constructed in this paper achieves the expected effect.

The Supply-Side Effects of Economic Policy.

1982 ◽  
Vol 14 (3) ◽  
pp. 429
Author(s):  
Paul D. Evans ◽  
Laurence H. Meyers
Keyword(s):  
Economic Policy ◽  
Side Effects ◽  
Supply Side

Supply-Side Effects of Disinflation Programs

1994 ◽  
Author(s):  
Jorge Roldós
Keyword(s):  
Side Effects ◽  
Supply Side

scholarly journals Relationship Between Energy Prices, Monetary Policy and Inflation; A Case Study of South Asian Economies

2014 ◽  
Vol 3 (1) ◽  
pp. 43-58
Author(s):  
Keyword(s):  
Monetary Policy ◽  
Side Effects ◽  
Interest Rate ◽  
Money Supply ◽  
Side Effect ◽  
Aggregate Demand ◽  
Oil Prices ◽  
Energy Prices ◽  
Aggregate Supply ◽  
The Cost

Abstract Monetary policy tools, including money supply and interest rate, are the most popular instruments to control inflation around the globe. It is assumed that a tight monetary policy, either in form of reduction in money supply or an increase in interest rate, will reduce inflation by reducing aggregate demand in an economy. However, monetary policy could be counterproductive if cost side effects of monetary tightening prevail. High energy prices may increase the cost of production by reducing aggregate supply in the economy. If tight monetary policy is used to reduce this cost push inflation, the cost side effect of energy prices will add to cost side effects of monetary tightening and will become dominant. In this case, the monetary policy could be counterproductive. Furthermore, simultaneous reduction in aggregate supply and aggregate demand will bring twofold reduction in output. Therefore greater care is needed in the use of monetary policy in the situation of cost push inflation. This article investigates the presence of cost side effect of monetary transmission mechanism, the role of international oil prices in domestic inflation, and implications for monetary policy. The findings suggest that both monetary policy and oil prices have cost side effects on inflation and monetary tightening could be counterproductive if used to reduce energy pushed inflationary trend.

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