Český finanční a účetní časopis 2006(1):163-169 | DOI: 10.18267/j.cfuc.135

Glenn Rudebusch's View on the Targeting of Short-Term Interest Rates

Karel Brůna
Ing. Karel Brůna, Ph.D. - odborný asistent; Katedra měnové teorie a politiky, Fakulta financí a účetnictví, Vysoká škola ekonomická v Praze, nám. W. Churchilla 4, 130 67 Praha 3; <bruna@vse.cz >.

The paper deals with G. Rudebusch's paper Federal Reserve Interest Rate Targeting, Rational Expectations and the Term Structure published in Journal of Monetary Economics in 1995. I define main resources of the study, discuss the most important parts of Rudebusch's paper and present key conclusions about the impact of central banks on the dynamics of money market interest rates. Besides I point out some problems that can influence our understanding of the behavior of interest rates. First of all this is the problem of instability of the period in which it is possible to make the correct prediction of the value of targeted interest rates. Hereafter I call attention to few technical aspects of managing the open market operations and last but not least I stress the problems of potential instability of term premium.

Keywords: Interest rate, Central bank, Open market operations, Monetary policy.
JEL classification: C22, E43, E52

Published: March 1, 2006  Show citation

ACS AIP APA ASA Harvard Chicago Chicago Notes IEEE ISO690 MLA NLM Turabian Vancouver
Brůna, K. (2006). Glenn Rudebusch's View on the Targeting of Short-Term Interest Rates. Czech Financial and Accounting Journal, 2006(1), 163-169. doi: 10.18267/j.cfuc.135
Download citation
  • BibTeX (.bib)
  • Bookends (.ris)
  • EasyBib (.ris)
  • EndNote (.enw)
  • EndNote 8 (.xml)
  • ISI WoS (.isi)
  • Medlars (.medlars)
  • Mendeley (.ris)
  • MODS (.xml)
  • Papers (.ris)
  • RefWorks (.txt)
  • RefManager (.ris)
  • RIS (.ris)
  • MS Word (.xml)
  • Zotero (.ris)
    • Open full article

    References

    1. Bartolini, L. - Bertola, G. - Prati, A. (2001): Banks´ Reserve Management, Transactions Costs, and the Timing of Federal Reserve Intervention. Journal of Banking and Finance, 2001, roč. 25, č. 7, s. 1287-1318. Go to original source...
    2. Bartolini, L. - Bertola, G. - Prati, A. (2002): Day-To-Day Monetary Policy and the Volatility of the Federal Funds Interest Rate. Journal of Money, Credit, and Banking, 2002, roč. 34, č. 1, s. 137-159. Go to original source...
    3. Cook, T. - Hahn, T. (1989): The Effect of Changes in the Federal Funds Rate Target on Market Interest Rates in the 1970s. Journal of Monetary Economics, 1989, roč. 24, č. 3, s. 331-351. Go to original source...
    4. Cook, T. - Hahn, T. (1990): Interest Rates Expectations and the Slope of the Money Market Yield Curve. Federal Reserve Bank of Richmond Economic Review, 1990, September/October, s. 3-24.
    5. ECB (2001): Bidding Behaviour of Counterparties in the Eurosystem´s Regular Open Market Operations. European Central Bank Monthly Bulletin, 2001, October, s. 51-63.
    6. FRBNY (2004): Domestic Open Market Operations during 2003. New York, Federal Reserve Bank of New York, 2004.
    7. Goodfriend, M. (1991): Interest Rates and the Conduct of Monetary Policy. CarnegieRochester Conference Serieson Public Policy, 1991, roč. 34, s. 7-30. Go to original source...
    8. Goodfriend, M (1993): Interest Rate Policy and the Inflation Scare Problem: 1979-1992. Federal Reserve Bank of Richmond Economic Quarterly, 1993, Winter, s. 1-23.
    9. McCallum, B. T. (1994): Monetary Policy and the Term Structure of Interest Rates. NBER Working Paper Series No. 4938, Cambridge, NBER, 1994. Go to original source...
    10. Mankiw, N. G. - Miron, J. A. (1986): The Changing Behavior of the Term Structure of Interest Rates. NBER Working Paper Series No. 1669, Cambridge, NBER, 1986. Go to original source...
    11. Rudebusch, G. D. (1995): Federal Reserve Interest Rate Targeting, Rational Expectations, and the Term Structure. Journal of Monetary Economics, 1995, roč. 35, č. 2, s. 245-274. Go to original source...
    12. Rudebusch, G. D. (2001): Term Structure Evidence on Interest Rate Smoothing and Monetary Policy Inertia. Journal of Monetary Economics, 2001, roč. 41, č. 1, s. 1-35. Go to original source...
    13. Shiller, R. J. - Campbell J. Y. - Schoenholtz, K. L. (1983): Forward Rates and Future Policy: Interpreting the Term Structure of Interest Rates. Cowles Foundation Discussion Paper No. 667, New Haven, Cowles Foundation for Research in Economics, 1983. Go to original source...

    This is an open access article distributed under the terms of the Creative Commons Attribution 4.0 International License (CC BY 4.0), which permits use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.


    Return to the content