; ; ; "ActiveFedora::Aggregation::ListSource" . a , ; "The Advantage of Transparent Instruments of Monetary Policy"; ; "batchuser@example.com"; "Atkeson, Andrew", "Kehoe, Patrick J."; "Federal Reserve Bank of Minneapolis"; "E61 - Policy Objectives; Policy Designs and Consistency; Policy Coordination", "F33 - International Monetary Arrangements and Institutions", "E50 - Monetary Policy, Central Banking, and the Supply of Money and Credit: General", "E52 - Monetary Policy", "F41 - Open Economy Macroeconomics"; "A classic question in international economics is whether it is better to use the exchange rate or the money growth rate as the instrument of monetary policy. A common argument is that the exchange rate has a natural advantage since exchange rates provide signals of policymakers’ actions that are easier to monitor than those provided by money growth rates. We formalize this argument in a simple model in which the government chooses which instrument it will use to target inflation. In it, the exchange rate is more transparent than the money growth rate in that the exchange rate is easier for the public to monitor. We find that the greater transparency of the exchange rate regime makes it easier to provide the central bank with incentives to pursue good policies and hence gives this regime a natural advantage over the money regime. "^^; "2001-10"; "2019-06-25T14:32:18.858144173+00:00"^^; "https://doi.org/10.21034/wp.614"; ; "https://creativecommons.org/licenses/by-nc/4.0/"; "2020-10-23T20:17:06.653896135+00:00"^^; "https://creativecommons.org/licenses/by-nc/4.0/"; "Research Paper"; "393", "39"; "Working paper (Federal Reserve Bank of Minneapolis. Research Department)"; "614"; ; ; ; ; "Federal Reserve Bank of Minneapolis. Research Department"; "An updated version of this Working Paper is available as [Staff Report 297: The Advantage of Transparency in Monetary Policy Instruments](https://doi.org/10.21034/sr.297)."^^; ; "Publication" . ; .