TY  - JOUR
AU  - Woodford,Michael
TI  - Monetary Policy in the Information Economy
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8674
PY  - 2001
Y2  - December 2001
UR  - http://www.nber.org/papers/w8674
L1  - http://www.nber.org/papers/w8674.pdf
N1  - Author contact info:
Michael Woodford
Department of Economics
Columbia University
420 W. 118th Street
New York, NY 10027
Tel: 212/854-1094
Fax: 212-854-8059
E-Mail: mw2230@columbia.edu
AB  - This paper considers two challenges that improvements in private-sector information-processing capabilities may pose for the effectiveness of monetary policy. It first considers the consequences of improved information about central-bank actions, and argues that the management of expectations will become even more important to effective monetary policy. The paper next considers the consequences of the potential erosion of private-sector demand for central-bank money. This should not fundamentally impair the ability of central banks to achieve their stabilization objectives, though it may require a new approach to the implementation of monetary policy. The advantages of a 'channel' system, in which central-bank standing facilities are the main tool used to control overnight interest rates, are discussed.
ER  -