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When Does Capital Account Liberalization Help More than it Hurts?

Arteta, Carlos Ó.; Eichengreen, Barry; Wyplosz, Charles - 2021

In this paper we reconsider the evidence on capital account liberalization and growth. While we find indications of a positive association, the effects vary with time, with how capital account liberalization is measured, and with how the relationship is estimated. The evidence that the effects...

Persistent link: https://www.econbiz.de/10013221506

The Equilibrium Degree of Transparency and Control in Monetary Policy

Faust, Jon; Svensson, Lars E. O. - 2022

We examine a central bank's endogenous choice of degree of control and degree of transparency, under both commitment and discretion. Under commitment, we find that the deliberate choice of sloppy control is far less likely under a standard central-bank loss function than reported for a less...

Persistent link: https://www.econbiz.de/10014157375

Contagious Currency Crises

Eichengreen, Barry; Rose, Andrew; Wyplosz, Charles - 2010

This paper is concerned with the fact that the incidence of speculative attacks tends to be temporally correlated; that is, currency crises appear to pass contagiously from one country to another. The paper provides a survey of the theoretical literature, and analyzes the contagious nature of...

Persistent link: https://www.econbiz.de/10014076135

Leaning Against the Wind : The Role of Different Assumptions About the Costs

Svensson, Lars E. O. - 2017

“Leaning against the wind” (LAW), that is, tighter monetary policy for financial-stability purposes, has costs in terms of a weaker economy with higher unemployment and lower inflation and possible benefits from a lower probability or magnitude of a (financial) crisis. A first obvious cost...

Persistent link: https://www.econbiz.de/10012948449

Monetary Policy with Model Uncertainty : Distribution Forecast Targeting

Svensson, Lars E. O.; Williams, Noah - 2021

We examine optimal and other monetary policies in a linear-quadratic setup with a relatively general form of model uncertainty, so-called Markov jump-linear-quadratic systems extended to include forward-looking variables. The form of model uncertainty our framework encompasses includes: simple...

Persistent link: https://www.econbiz.de/10013218440

Indicator Variables for Optimal Policy Under Asymmetric Information

Svensson, Lars E. O.; Woodford, Michael - 2021

The optimal weights on indicators in models with partial information about the state of the economy and forward-looking variables are derived and interpreted, both for equilibria under discretion and under commitment. The private sector is assumed to have information about the state of the...

Persistent link: https://www.econbiz.de/10013218510

Inflation Targeting as a Monetary Policy Rule

Svensson, Lars E. O. - 2021

The purpose of the paper is to survey and discuss inflation targeting in the context of monetary policy rules. The paper provides a general conceptual discussion of monetary policy rules, attempts to clarify the essential characteristics of inflation targeting, compares inflation targeting to...

Persistent link: https://www.econbiz.de/10013218714

How Should Monetary Policy Be Conducted in an Era of Price Stability?

Svensson, Lars E. O. - 2021

The paper discusses several issues related to how monetary policy should be conducted in an era of price stability. Low inflation (with base drift in the price level) and price-level stability (without such base drift) are compared, and a suitable loss function (corresponding to flexible...

Persistent link: https://www.econbiz.de/10013219290

Hegemonic Stability Theories of the International Monetary System

Eichengreen, Barry - 2021

only when dominated by a single, exceptionally powerful national economy. In particular, this "theory of hegemonic … applicability of hegemonic stability theory to international monetary relations, approaching the question from both theoretical and … empirical vantage points. While that theory is of some help for understanding the relatively smooth operation of the classical …

Persistent link: https://www.econbiz.de/10013221314

The Foreign Exchange Risk Premium in a Target Zone with Devaluation Risk

Svensson, Lars E. O. - 2021

The foreign exchange risk premium in an exchange rate target zone regime with devaluation/realignment risks is derived. In contrast to previous literature, the exchange rate's heteroscedasticity within the bard, as well as a separate devaluation/realignment risk, is taken into account. The risk...

Persistent link: https://www.econbiz.de/10013222618