| Summary: | 碩士 === 國立臺灣大學 === 經濟學研究所 === 94 === Based on the Fang and Lai (2002) model, this thesis analyzes the stabilizing performance of target zones (including the money supply target zones and the interest rate target zones) on macroeconomic variables (including output and commodity prices). Several central conclusions emerge from the analysis:
(1) When the economy faces aggregate supply disturbances, the interest rate target zones tend to stabilize output and destabilize commodity prices. On the contrary, the money supply target zones tend to lower the variability of commodity prices, but raise the variability of output. Thus, if the monetary authorities choose to stabilize output, they should adopt the interest rate target zones. On the other hand, the monetary authorities
should adopt the money supply target zones when they choose to stabilize commodity prices.
(2) If the economy experiences demand shocks, the announcement that the monetary authorities intend to defend the interest rate target zones raises the volatility of both output and commodity prices. However, the money supply target zones tend to lower the
variability of both output and commodity prices. As a result, the monetary authorities should adopt the money supply target zones.
(3) When shocks hit the economy through the money demand side, the interest rate target zones stabilize both output and commodity prices. The money supply target zones, however, destabilize both output and commodity prices. Therefore, the monetary authorities should choose the interest rate target zones.
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