Evaluating the effectiveness of monetary reforms

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Using a monthly model of the economy, containing a detailed financial sector, various monetary reforms are evaluated in a stochastic setting. The setting is stochastic because parameters must be estimated from finite data sets and because unexplained residuals exist. The objective function is a single-period, simple quadratic function in income. The problem then reduces to finding the opportunity locus (mean-variance curve) corresponding to each reform; the more effective the reform the more favorable the mean-variance tradeoff. The general finding is that most of the reforms considered are effective, but their impact is not very significant.

Original languageEnglish (US)
Pages (from-to)271-296
Number of pages26
JournalJournal of Monetary Economics
Issue number3
StatePublished - Jul 1976


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