Research Discussion Paper – RDP 9702 The Lags of Monetary Policy

Contents

• Introduction
• The Lags of Monetary Policy
• Taking Account of the Policy Response
• Conclusions
• Appendix A: Monte Carlo Procedure
• Appendix B: Estimating the Bias from Ordinary Least Squares
• References

We are grateful for comments from Adrian Pagan, colleagues at the Reserve Bank and participants at the January 1997 Meeting of Central Bank Model Builders and Econometricians at the Bank for International Settlements. We also thank Gordon Menzies for showing us his earlier work on instruments for the short-term real interest rate. The views expressed are those of the authors and should not be attributed to the Reserve Bank of Australia.