Showing 41 - 50 of 78
The paper reconsiders the role of money and banking in monetary policy analysis by including a banking sector and money in an optimizing model otherwise of a standard type. The model is implemented quantitatively, with a calibration based on U.S. data. It is reasonably successful in providing an...
Persistent link: https://www.econbiz.de/10012465446
The fiscal theory of the price level (FTPL) has attracted much attention but disagreement remains concerning its defining characteristics. Some writers have emphasized implications regarding interest-rate pegging and determinacy of RE solutions, whereas others have stressed its capacity to...
Persistent link: https://www.econbiz.de/10012466580
Traditionally, the effects of monetary policy actions on output are thought to be transmitted via monetary or credit channels. Real business cycle theory, by contrast, highlights the role of real price changes as a source of revisions in spending and production decisions. Motivated by the desire...
Persistent link: https://www.econbiz.de/10012469365
Much recent monetary policy analysis has featured stochastic simulations with small structural macroeconomic models that include: a spending vs. saving ( IS') sector; a price-adjustment sector; and an interest rate policy rule. The first two are frequently specified so as to reflect optimizing...
Persistent link: https://www.econbiz.de/10012470498
The new open-economy macroeconomics' seeks to provide an improved basis for monetary and exchange-rate policy through … the construction of open-economy models that feature rational expectations, optimizing agents, and slowly adjusting prices … consumer goods but rather as raw-material inputs to the home economy's productive process. This treatment leads to a clean and …
Persistent link: https://www.econbiz.de/10012470551
The following arguments are developed: (i) models without monetary aggregates do not imply that inflation is a non-monetary phenomenon and are not necessarily non-monetary models; (ii) theoretical considerations suggest that such models are misspecified, but the quantitative significance of this...
Persistent link: https://www.econbiz.de/10012470552
To consider the prospects, looking 20-30 years into the future, for monetary policymaking in accordance with policy rules, one must evaluate their present importance. That requires some definition of what constitutes rule-based monetary policy in practice, since no actual central bank will ever...
Persistent link: https://www.econbiz.de/10012470821
This paper reviews the distinction between the timeless perspective and discretionary modes of monetary policymaking, the former representing rule-based policy as recently formalized by Woodford (1999b). In models with forward-looking expectations, this distinction is greater than in the models...
Persistent link: https://www.econbiz.de/10012470822
Dynamic optimizing models with an IS-LM-type structure and slow price adjustments have been used for much recent monetary policy analysis, but usually with capital and investment treated as exogenous a significant restriction. This paper demonstrates that investment decisions can be endogenized...
Persistent link: https://www.econbiz.de/10012470829
This paper conducts counterfactual historical analysis of several monetary policy rules by contrasting actual settings of instrument variables with values that would have been specified by the rules in response to prevailing conditions. Of particular interest is whether major policy mistakes,...
Persistent link: https://www.econbiz.de/10012471025