Shock from graying : Is the demographic shift weakening monetary policy effectiveness /

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Bibliographic Details
Author / Creator:	Imam, Patrick, author.
Imprint:	Washington, D.C. : International Monetary Fund, Monetary and Capital Markets Dept., 2013.
Description:	1 online resource (38 pages).
Language:	English
Series:	IMF working paper ; WP/13/191 IMF working paper ; WP/13/191.
Subject:	Monetary policy -- Econometric models. Aging -- Economic aspects -- Econometric models. Demography -- Economic aspects -- Econometric models. Monetary policy -- Econometric models. Electronic books.
Format:	E-Resource Book
URL for this record:	http://pi.lib.uchicago.edu/1001/cat/bib/12502085

Hidden Bibliographic Details
Other authors / contributors:	International Monetary Fund. Monetary and Capital Markets Department, issuing body.
Notes:	"September 2013." Includes bibliographical references.
Summary:	"Empirical evidence is mounting that, in advanced economies, changes in monetary policy have a more benign impact on the economy - given better anchored inflation expectations and inflation being less responsive to variation in unemployment - compared to the past. The authors examine another aspect that could explain this empirical finding, namely the demographic shift to an older society. The paper first clarifies potential transmission channels that could explain why monetary policy effectiveness may moderate in graying societies. It then uses Bayesian estimation techniques for the U.S., Canada, Japan, U.K., and Germany to confirm a weakening of monetary policy effectiveness over time with regards to unemployment and inflation. After proving the existence of a panel co-integration relationship between ageing and a weakening of monetary policy, the study uses dynamic panel OLS techniques to attribute this weakening of monetary policy effectiveness to demographic changes. The paper concludes with policy implications."--Abstract.

Table of Contents:

Cover; Contents; I. Introduction; II. Literature Review; Table; Table 1: Channels through which Monetary Transmission Mechanism differs across Demographics; III. The Time-varying Impact of Monetary Policy: Has Monetary Effectiveness Weakened Over Time?; A. Model; B. Estimation Technique; C. Empirical Results; Figure; Figure 1: The Distribution of the Difference in Maximum Responses (peak to trough); Figure 2: The Impact of Monetary Policy on Unemployment; Figure 3: The Impact of Monetary Policy on Inflation.
IV. Does the Demographic Shift Explain the Weakening of the Effectiveness of Monetary Policy?A. Estimates and Findings; Table 2: Panel Unit-Root Tests; Table 3: Estimated D-OLS Regression; B. Robustness Tests; Figure 4: Baseline and Robustness test; V. Conclusion and Policy Implications; VI. References; Figure 1. Life Expectancy at Birth, by Country, 2010 and 2050; Figure 2. Demographic Shift Around the World.

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