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Conventional and unconventional monetary policy

Cúrdia, Vasco; Woodford, Michael - 2009

We extend a standard New Keynesian model both to incorporate heterogeneity in spending opportunities along with two sources of (potentially time-varying) credit spreads and to allow a role for the central bank's balance sheet in determining equilibrium. We use the model to investigate the...

Persistent link: https://www.econbiz.de/10010287020

Near-rational exuberance

Bullard, James; Evans, George W.; Honkapohja, Seppo - 2005

We study how the use of judgement or “add-factors” in macroeconomic forecasting may disturb the set of equilibrium outcomes when agents learn using recursive methods. We isolate conditions under which new phenomena, which we call exuberance equilibria, can exist in standard macroeconomic...

Persistent link: https://www.econbiz.de/10011604601

Welfare-based monetary policy rules in an estimated DSGE model of the US economy

Juillard, Michel; Karam, Philippe; Laxton, Douglas; … - 2006

We develop and estimate a stylized micro-founded model of the US economy. Next we compute the parameters of a simple interest rate policy rule that maximizes the unconditional mean of utility. We show that such a welfare-based rule lies close to the Taylor efficiency frontier. A counterfactual...

Persistent link: https://www.econbiz.de/10011604659

How Important is Money in the Conduct of Monetary Policy?

Woodford, Michael - 2006

This paper was presented as the 2006 W.A. Mackintosh Lecture at Queen's University. I consider some of the leading arguments for assigning an important role to tracking the growth of monetary aggregates when making decisions about monetary policy. First, I consider whether ignoring money means...

Persistent link: https://www.econbiz.de/10011940718

Credit spreads and monetary policy

Cúrdia, Vasco; Woodford, Michael - 2009

We consider the desirability of modifying a standard Taylor rule for a central bank's interest rate policy to incorporate either an adjustment for changes in interest rate spreads (as proposed by Taylor [2008] and McCulley and Toloui [2008]) or a response to variations in the aggregate volume of...

Persistent link: https://www.econbiz.de/10010287064

Expectations and the stability problem for optimal monetary policies

Honkapohja, Seppo; Evans, George W. - 2000

Eine auf den Fundamentaldaten beruhende Regelbindung der Geldpolitik ohne Selbstverpflichtung, die bei vollkommen … geeigneter Weise in die optimale Geldpolitik einbezogen werden. Diese eindeutige Schlußfolgerung gilt auch dann, wenn sich der … wichtig es ist, die Geldpolitik angemessen zu gestalten und dabei nicht nur die Fundamentaldaten, sondern auch direkt die …

Persistent link: https://www.econbiz.de/10010295698

Robustly optimal monetary policy with near-rational expectations

Woodford, Michael - 2005

The paper considers optimal monetary stabilization policy in a forward-looking model, when the central bank recognizes that private-sector expectations need not be precisely modelconsistent, and wishes to choose a policy that will be as good as possible in the case of any beliefs that are close...

Persistent link: https://www.econbiz.de/10010298361

Deflationary shocks and monetary rules: An open-economy scenario analysis

Laxton, Douglas; N'Diaye, Papa; Pesenti, Paolo - 2006

The paper considers the macroeconomic transmission of demand and supply shocks in an open economy under alternative assumptions about whether the zero interest rate floor (ZIF) is binding. It uses a two-country general-equilibrium simulation model calibrated to the Japanese economy relative to...

Persistent link: https://www.econbiz.de/10010283308

Credit frictions and optimal monetary policy

Cúrdia, Vasco; Woodford, Michael - 2008

We extend the basic (representative-household) New Keynesian [NK] model of the monetary transmission mechanism to allow for a spread between the interest rate available to savers and borrowers, that can vary for either exogenous or endogenous reasons. We find that the mere existence of a...

Persistent link: https://www.econbiz.de/10011506667