Simple interest rate rules with a role for money

The paper analyses the performance of simple interest rate rules which feature a response to noisy observations of inflation, output and money growth. The analysis is based on a small empirical model of the hybrid New Keynesian type which has been estimated on euro area data by Stracca (2007). To assess the magnitude of the measurement problems regarding the feedback variables, we draw upon the real-time data set for Germany compiled by Gerberding et al. (2004). We find that interest rate rules which include a response to money growth outperform both Taylor-type rules and speed limit policies once real-time output gap uncertainty is accounted for. One reason is that targeting money growth introduces history dependence into the policy rule which is desirable when private agents are forward-looking. The second reason is that money growth contains information on the "true" growth rate of output which can only be measured imperfectly. --Monetary policy rules,euro area,data uncertainty

Opting out of the great inflation: German monetary policy after the break down of Bretton Woods

During the turbulent 1970s and 1980s the Bundesbank established an outstanding reputation in the world of central banking. Germany achieved a high degree of domestic stability and provided safe haven for investors in times of turmoil in the international financial system. Eventually the Bundesbank provided the role model for the European Central Bank. Hence, we examine an episode of lasting importance in European monetary history. The purpose of this paper is to highlight how the Bundesbank monetary policy strategy contributed to this success. We analyze the strategy as it was conceived, communicated and refined by the Bundesbank itself. We propose a theoretical framework (following Söderström, 2005) where monetary targeting is interpreted, first and foremost, as a commitment device. In our setting, a monetary target helps anchoring inflation and inflation expectations. We derive an interest rate rule and show empirically that it approximates the way the Bundesbank conducted monetary policy over the period 1975-1998. We compare the Bundesbank´s monetary policy rule with those of the FED and of the Bank of England. We find that the Bundesbank´s policy reaction function was characterized by strong persistence of policy rates as well as a strong response to deviations of inflation from target and to the activity growth gap. In contrast, the response to the level of the output gap was not significant. In our empirical analysis we use real-time data, as available to policy-makers at the time. JEL Classification: E31, E32, E41, E52, E5

Money-based interest rate rules: lessons from German data

The paper derives the monetary policy reaction function implied by money growth targeting. It consists of an interest rate response to deviations of the inflation rate from target, to the change in the output gap, to money demand shocks and to the lagged interest rate. In the second part, it is shown that this type of inertial interest rate rule characterises the Bundesbank's monetary policy from 1979 to 1998 quite well. This result is robust to the use of real-time or ex post data and to the consideration of serially correlated errors. The main lesson is that, in addition to anchoring long-term inflation expectations, monetary targeting introduces inertia and history-dependence into the monetary policy rule. This is advantageous when private agents have forward-looking expectations and when the level of the output gap is subject to persistent measurement errors. --Monetary policy,Taylor rule,money growth targets,history dependence

The Pauline Understanding of The Law of Christ

It is puzzling, then, to hear Paul affirming the validity of the law, as he does in his letter to the Romans (3:21,31; 7:12,16) and in the first letter to the Corinthians (14:34). It seems to be a contradiction in terms when Paul combines law and Christ in the expression the law of Christ (Gal. 6:2). The purpose of this study is to find out what Paul means by this phrase and those phrases which are similar (1 Cor. 9:21; Rom. 3:27; 8:2), in view of his teaching on law and the revelation given in Christ

Reflections of New Testament Passages Found in the Apostolic Fathers

This paper will attempt to determine the attitude of the Apostolic Fathers toward the canonical New Testament writings on the basis of their references to and use of passages and phrases from those writings. Answers will be sought to the following questions. Which books of the New Testament are used by the Apostolic Fathers? Are these books used in a comparatively equal degree by all of the Fathers? Do the Fathers quote the New Testament writings and refer to them directly? If not, how do they introduce the New Testament material which they use? Do they copy passages from the New Testament directly, or do they freely adapt the language of the disciples and apostles to their own form of presentation? Do they borrow only from books included in our canon of the New Testament, or only from writings of apostolic origin, or do they use materials from other sources as well? The answers to these questions will be sought on a basis of a study of those Apostolic Fathers which are included in Lightfoot\u27s edition and are dated by him as being composed prior to 150 A. D. These are Barnabas, 1 Clement, Ignatius, Polycarp, Didache, Hermas, and 2 Clement

Opting out of the Great Inflation: German monetary policy after the break down of Bretton Woods

During the turbulent 1970s and 1980s the Bundesbank established an outstanding reputation in the world of central banking. Germany achieved a high degree of domestic stability and provided safe haven for investors in times of turmoil in the international financial system. Eventually the Bundesbank provided the role model for the European Central Bank. Hence, we examine an episode of lasting importance in European monetary history. The purpose of this paper is to highlight how the Bundesbank monetary policy strategy contributed to this success. We analyze the strategy as it was conceived, communicated and refined by the Bundesbank itself. We propose a theoretical framework (following Söderström, 2005) where monetary targeting is interpreted, first and foremost, as a commitment device. In our setting, a monetary target helps anchoring inflation and inflation expectations. We derive an interest rate rule and show empirically that it approximates the way the Bundesbank conducted monetary policy over the period 1975-1998. We compare the Bundesbank's monetary policy rule with those of the FED and of the Bank of England. We find that the Bundesbank's policy reaction function was characterized by strong persistence of policy rates as well as a strong response to deviations of inflation from target and to the activity growth gap. In contrast, the response to the level of the output gap was not significant. In our empirical analysis we use real-time data, as available to policymakers at the time. JEL Classification: E31, E32, E41, E52, E58inflation, monetary policy, Monetary Targeting, policy, price stability

Groups of Divisibility

In this thesis, we examine a part of abstract algebra known as Groups of Divisibility. We construct these special groups from basic concepts. We begin with partially-ordered sets, then build our way into groups, rings, and even structures akin to rings of polynomials. In particular, we explore how elementary algebra evolves when an ordering is included with the operations. Our results follow the work done by Anderson and Feil, however we include more explicit proofs and constructions. Our primary results include proving that a group of divisibility can be provided with an order to make it a partially-ordered group; that every Bezout domain is a pseudo-Bezout domain; and that an integral domain is a pseudo-Bezout domain if and only if the partial order on its group of divisibility is a lattice

Opting out of the Great Inflation: German Monetary Policy after the Break Down of Bretton Woods

During the turbulent 1970s and 1980s the Bundesbank established an outstanding reputation in the world of central banking. Germany achieved a high degree of domestic stability and provided safe haven for investors in times of turmoil in the international financial system. Eventually the Bundesbank provided the role model for the European Central Bank. Hence, we examine an episode of lasting importance in European monetary history. The purpose of this paper is to highlight how the Bundesbank monetary policy strategy contributed to this success. We analyze the strategy as it was conceived, communicated and refined by the Bundesbank itself. We propose a theoretical framework (following Söderström, 2005) where monetary targeting is interpreted, first and foremost, as a commitment device. In our setting, a monetary target helps anchoring inflation and inflation expectations. We derive an interest rate rule and show empirically that it approximates the way the Bundesbank conducted monetary policy over the period 1975-1998. We compare the Bundesbank's monetary policy rule with those of the FED and of the Bank of England. We find that the Bundesbank's policy reaction function was characterized by strong persistence of policy rates as well as a strong response to deviations of inflation from target and to the activity growth gap. In contrast, the response to the level of the output gap was not significant. In our empirical analysis we use real-time data, as available to policy-makers at the time.Inflation, Price Stability, Monetary Policy, Monetary Targeting, Policy Rules