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- W1487936351 abstract "Arguments for a prominent role for attention to the growth rate of monetary aggregates in the conduct of monetary policy are often based on references to low-frequency reduced-form relationships between money growth and inflation. The 'two-pillar Phillips curve' proposed by Gerlach (2004) has recently attracted a great deal of interest in the euro area, where it is sometimes supposed to provide empirical support for the wisdom of a 'two-pillar strategy' that uses distinct analytical frameworks to assess shorter-run and longer-run risks to price stability. I show, however, that regression coefficients of the kind reported by Assenmacher-Wesche and Gerlach (2006a) among others are quite consistent with a 'new Keynesian' model of inflation determination, in which the quantity of money plays no role in inflation determination, at either high or low frequencies. I also show that empirical results of this kind do not in themselves establish that money growth must be useful in forecasting inflation, either in the short run or over a longer run. Hence they provide little support for the ECB's monetary 'pillar'." @default.
- W1487936351 created "2016-06-24" @default.
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- W1487936351 date "2007-09-01" @default.
- W1487936351 modified "2023-09-25" @default.
- W1487936351 title "Does a two-pillar Phillips curve justify a two-pillar monetary policy strategy?" @default.
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- W1487936351 doi "https://doi.org/10.7916/d8qv3zq9" @default.
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