Eliminating the 3 years of nonborrowed reserves
targeting from the sample even sharpens these results.
19) Nonborrowed reserves
are the difference between total reserves and reserves from the Fed's discount window.
Eventually, the Volcker FOMC stopped short-term interest rate control and claimed that the target was nonborrowed reserves
First, following Den Haan, we difference the variables, except the ratio of nonborrowed reserves
and the federal funds rate; this is done to address the possible presence of unit roots.
In September, the Bank of Mexico added 100 billion pesos to the amount by which it leaves the banking system "short" of nonborrowed reserves
The supply of reserves is depicted as a kinked schedule: a perfectly inelastic supply-of-reserves section corresponding to the level of nonborrowed reserves
determined by open market operations, and an upward-sloping section corresponding to discount-window borrowing.
Whether we measure money by nonborrowed reserves
or more broadly, injections of money are not the same as withdrawals of, say, Treasury bills (T-bills).
With nonborrowed reserves
ignored, all reserves were borrowed reserves [R.
The fourth section presents the model in the form of a Taylor series expansion, and the fifth section extends the theory to excess reserves, free reserves, total reserves, and nonborrowed reserves
Christiano and Eichenbaum (1992) use nonborrowed reserves
to establish the association between monetary liquidity and interest rate variations.
I use the results presented by Bernanke and Blinder (1992) that the supply of nonborrowed reserves
is infinitely elastic within the month to restrict the relationship between innovations in output growth, inflation and the federal funds rate.
monetary policy variables: exogenous shocks either to the federal funds rate or to the ratio of nonborrowed reserves
to total reserves, and movements in the Romer and Romer index of monetary policy contractions.