CHOOSING A MONETARY INSTRUMENT - THE CASE OF SUPPLY-SIDE SHOCKS - COMMENT Academic Article uri icon

abstract

  • In a recent paper Craine and Havenner (1981) claim that 'an additional advantage of the linear-quadratic framework (which is not well known) is that the basic forces affecting the instrument choice decision can be analyzed without an explicit specification for price expectations since the distribution of the error terms in a linear model is independent of the predetermined variables' (p. 219). The aim of this note is to demonstrate that Craine and Havenner's claim does not generalize to models with expectations of future variables conditioned on present information, such as Turnovsky's (1980) model. 1984.

published proceedings

  • JOURNAL OF ECONOMIC DYNAMICS & CONTROL

author list (cited authors)

  • JANSEN, D. W.

citation count

  • 0

complete list of authors

  • JANSEN, DW

publication date

  • January 1, 1984 11:11 AM