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Romer, Christina D.; Romer, David H. - 2022

This paper analyzes the contributions of monetary and fiscal policy to postwar economic recoveries. We find that the Federal Reserve typically responds to downturns with prompt and large reductions in interest rates. Discretionary fiscal policy, in contrast, rarely reacts before the trough in...

Persistent link: https://www.econbiz.de/10013309225

Liquidity Traps : An Interest-Rate-Based Exit Strategy

Schmitt-Grohé, Stephanie - 2010

This paper analyzes a potential strategy for escaping liquidity traps. The strategy is based on an augmented Taylor-type interest-rate feedback rule and differs from usual specifications in that when inflation falls below a threshold, the central bank temporarily deviates from the traditional...

Persistent link: https://www.econbiz.de/10013136358

Optimal Simple and Implementable Monetary and Fiscal Rules : Expanded Version

Schmitt-Grohé, Stephanie - 2006

This paper computes welfare-maximizing monetary and fiscal policy rules in a real business cycle model augmented with sticky prices, a demand for money, taxation, and stochastic government consumption. We consider simple feedback rules whereby the nominal interest rate is set as a function of...

Persistent link: https://www.econbiz.de/10012779616

Optimal Simple and Implementable Monetary and Fiscal Rules

Schmitt-Grohé, Stephanie; Uribe, Martín - 2021

The goal of this paper is to compute optimal monetary and fiscal policy rules in a real business cycle model augmented with sticky prices, a demand for money, taxation, and stochastic government consumption. We consider simple policy rules whereby the nominal interest rate is set as a function...

Persistent link: https://www.econbiz.de/10013220424

Understanding the Fiscal Theory of the Price Level

Christiano, Lawrence J.; Fitzgerald, Terry J. - 2021

Persistent link: https://www.econbiz.de/10013223567

Managing Currency Pegs

Schmitt-Grohé, Stephanie; Uribe, Martín - 2021

rigidity makes the economy prone to involuntary unemployment during external crises. This paper presents a graphical analysis …

Persistent link: https://www.econbiz.de/10013224397

Optimal Fiscal and Monetary Policy Under Imperfect Competition

Schmitt-Grohé, Stephanie; Uribe, Martín - 2021

-price, production economy without capital. It shows analytically that in this economy the nominal interest rate acts as an indirect tax …

Persistent link: https://www.econbiz.de/10013237034

Optimal Fiscal and Monetary Policy in a Medium-Scale Macroeconomic Model : Expanded Version

Schmitt-Grohé, Stephanie; Uribe, Martín - 2021

In this paper, we study Ramsey-optimal fiscal and monetary policy in a medium-scale model of the U.S.\ business cycle. The model features a rich array of real and nominal rigidities that have been identified in the recent empirical literature as salient in explaining observed aggregate...

Persistent link: https://www.econbiz.de/10013240563

Optimal Fiscal and Monetary Policy Under Sticky Prices

Schmitt-Grohé, Stephanie; Uribe, Martín - 2021

stochastic production economy without capital. The government finances an exogenous stream of purchases by levying distortionary …

Persistent link: https://www.econbiz.de/10013240611

The Evolution of Economic Understanding and Postwar Stabilization Policy

Romer, Christina D.; Romer, David H. - 2022

functioning of the economy and the effects of policy. We document the changes in beliefs using contemporaneous discussions of the … economy and policy by monetary and fiscal policymakers and, for the period since the late 1960s, using the Federal Reserve …'s internal forecasts. We find that policymakers' understanding of the economy has not exhibited steady improvement. Instead, the …

Persistent link: https://www.econbiz.de/10013322316