TY  - JOUR
AU  - Ireland,Peter N.
TI  - Implementing the Friedman Rule
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8821
PY  - 2002
Y2  - March 2002
UR  - http://www.nber.org/papers/w8821
L1  - http://www.nber.org/papers/w8821.pdf
N1  - Author contact info:
Peter N. Ireland
Boston College
Department of Economics
140 Commonwealth Ave.
Chestnut Hill, MA 02467-3859
Tel: 617/552-3687
Fax: 617/552-2308
E-Mail: irelandp@bc.edu
AB  - In cash-in-advance models, necessary and sufficient conditions for the existence of an equilibrium with zero nominal interest rates and Pareto optimal allocations place restrictions mainly on the very long-run, or asymptotic, behavior of the money supply. When these asymptotic conditions are satisfied, they leave the central bank with a great deal of flexibility to manage the money supply over any finite horizon.  But what happens when these asymptotic conditions fail to hold?  This paper shows that the central bank can still implement the Friedman rule if its actions are appropriately constrained in the short run.
ER  -