# 貨幣銀行學chapter 17
###### tags: `貨幣銀行學`
## Chapter examines
1. is the goals of monetary policy
2. important strategies :arrow_forward:1.inflation targeting
## Learning objectives
1. nominal anchor([名義錨模式](https://wiki.mbalib.com/zh-tw/%E5%90%8D%E4%B9%89%E9%94%9A%E6%A8%A1%E5%BC%8F))
2. six goals of monetary policy
3. hierarchical mandate v.s dual mandate
(dual mandate強調控制通脹和就業最大化為雙重目標，hierarchical mandate則著重控制通脹（優先）)
5. history of monetary policy in :us:
6. lessons from the global financial crisis
7. monetary policy and asset price bubbles
8. Taylor rule
## Social and economic cost of inflation
1. purchasing power ,contract cost ,menu cost......
2. maintaining a stable price level as a goal of economic policy
3. Think :
- flexible v.s stable
- micro v.s macro
- a good v.s a basket of goods
## nominal anchor([名義錨模式](https://wiki.mbalib.com/zh-tw/%E5%90%8D%E4%B9%89%E9%94%9A%E6%A8%A1%E5%BC%8F))
1. a nominal variable such as inflation rate and money supply
2. Adherence(維持) to monetary anchor that keep the nominal variable with in a narrow range :arrow_forward: price stability
3. Milton Friedman: k-percent rule
- M~2019~ = (1+k%)M~2018~
4. Nominal anchor limits time-inconsistency([時序不一致](https://wiki.mbalib.com/zh-tw/%E8%B4%A7%E5%B8%81%E6%94%BF%E7%AD%96%E6%97%B6%E9%97%B4%E4%B8%8D%E4%B8%80%E8%87%B4%E6%80%A7))
## Time-Inconsistency problem([時序不一致](https://wiki.mbalib.com/zh-tw/%E8%B4%A7%E5%B8%81%E6%94%BF%E7%AD%96%E6%97%B6%E9%97%B4%E4%B8%8D%E4%B8%80%E8%87%B4%E6%80%A7))
1. we find ourselves unable to consistently follow a good plan(年後減肥??????)
2. time inconsistency problem in central bank
1. central bankers claim that they like low inflation
2. central bankers also like higher-output
3. central bankers conduct expansionary monetary policy when inflation low
4. workers and firms raise their expectation on inflation
5. price and wages are set based on higher inflation expectation
6. price :up: ,wage :up: then inflation :up:
## In addition to price stability, there are 5 more goals for conducting monetary policy
### goal 1:
* high employment and output stability
1. higher unemployment causes human misery
2. higher unemployment :arrow_right: idle resources(閒置資源) :arrow_right: low output
* higher employment is desirable.But how high should it be?unemployment should not be zero !
1. frictional unemployment([摩擦性失業](https://wiki.mbalib.com/zh-tw/%E6%91%A9%E6%93%A6%E6%80%A7%E5%A4%B1%E4%B8%9A)): worker and firms search for good match-up-a mismatch between job requirement and skills of local workers
2. structural unemployment([結構性失業](https://wiki.mbalib.com/zh-tw/%E7%BB%93%E6%9E%84%E6%80%A7%E5%A4%B1%E4%B8%9A)):

* a more reasonable goal is to maintain the unemployment rate at the natural rate of unemployment([自然失業率](https://wiki.mbalib.com/zh-tw/%E8%87%AA%E7%84%B6%E5%A4%B1%E4%B8%9A%E7%8E%87))
* natural rate of unemployment
:arrow_right: natural rate of output([潛在產出](https://wiki.mbalib.com/zh-tw/%E7%BB%93%E6%9E%84%E6%80%A7%E5%A4%B1%E4%B8%9A))
### goal 2: economics growth
* capital stock :arrow_right: productivity :up: economics :up:
* encourage firm to invest
### goal 3: stability of financial markets
* financial crises
:arrow_right:financial market's main function
### goal 4: interest rate stability
* recall : chapter 4
i :up: then bond price:arrow_down: capital loss of holding bonds
interest risk
### goal 5: stability in foreign exchange market
* price of import and export good
* import induced inflation
* competitive of domestic industry
### 1 + 5 goal: Which one is the primary goal?
* In the long run :
high inflation :arrow_right: :x:lower unemployment
no trade-off between inflation and unemployment
* In the long run there exist trade-off
### Hierarchical :vs: dual mandate
* hierarchical mandate : price stability
* dual mandate : price stability and maximum employment
### inflation targeting
* inflation rate as the nominal anchor to achieve price stability
### elements of inflation targeting
* public announcement, number
* commitment to price stability
* inflation inclusive
* transparency of MP
* transparency(課責)
### lesson from the global financial
* financial market matters
* zero lower bound on interest rate
* cost of cleaning up a crisis
* price and output stability :arrow_right: :x: financial stability
### implication of inflation targeting
* level of inflation
1. in the long run π^*^ = π^e^
2. Fisher equation i= i~r~+ π^e^ :arrow_right: i~r~= i -π^e^
3. consider zero lower bound
i=0, π^e^= π^*^=2%
:arrow_right: i~r~= i- π^e^ =0-2%=-2%
4. consider i=0 , π^e^= π^*^= 4%
:arrow_right: i~r~= i- π^e^ =0-4%=-4%
:::success
* ex 台灣房地產問題:
利率低=>美貨幣寬鬆政策
台灣資本利得稅低
造就高房價
:::
### Asset price bubbles:
* pronounced in asset price that depart from fundamental values
### Type of asset price bubbles
1. credit-driven bubbles
2. bubbles driven by irrational exuberance
### Which policy to pop bubbles
1. macro prudential policy(總體審慎政策)
2. monetary policy
* risk taking
* side effect