Research Discussion Paper – RDP 9604 Issues in Modelling Monetary Policy
October 1996
Abstract
This paper reviews issues in the econometric modelling of monetary policy in the light of recent experience and research. Two main sets of issues are covered: first, the operation of policy including the specification of the instrument and objectives; and second, the transmission of monetary policy effects to the wider economy. There is also a discussion of the inherent limitations on the ability to quantify the role of monetary policy in econometric models.