Monetary policy implementation and the federal funds rate


Nautz, Dieter ; Schmidt, Sandra


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URL: http://ub-madoc.bib.uni-mannheim.de/2003
URN: urn:nbn:de:bsz:180-madoc-20030
Document Type: Working paper
Year of publication: 2008
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: E43 E52 C22 ,
Subject headings (SWD): Geldpolitik , Mindestreservepolitik , Wirkungsanalyse , Wirtschaftspolitik , Tagesgeld , USA
Keywords (English): Dynamics and Volatility of the Federal Funds Rate , Monetary Policy Implementation , Central Bank Communication , Reserve Requirements
Abstract: This paper investigates how the implementation of monetary policy affects the dynamics and the volatility of the federal funds rate. Since the early 1980s, the most important changes in the Fed’s conduct of monetary policy refer to the role of the federal funds rate target and the reserve requirement system. We show that the improved communication and transparency regarding the federal funds rate target has significantly increased the Fed’s influence on the federal funds rate since 1994. By contrast, the declining role of required reserves in the U.S. has contributed to higher federal funds rate volatility. Our results suggest that the planned introduction of remunerated reserves will further enhance the controllability of the federal funds rate.
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Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Nautz, Dieter ; Schmidt, Sandra (2008) Monetary policy implementation and the federal funds rate. Open Access [Working paper]
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