This paper employs a New Keynesian model in which the central bank formulates a robust control approach to policy and firms hold working capital. We model credit market distortions in terms of a worst-case interest rate spread. The degree of policy aggressiveness increases in the size of the...

Analyzing monetary policy in China is not straightforward because the People's Bank of China (PBoC) implements policy by using more than one instrument. In this paper we use a Qual VAR, a conventional VAR system augmented with binary policy announcements, to extract a latent indicator of...

The personalities of central bankers moved center stage during the recent financial crisis. Some central bankers even gained superstar status. In this paper, we evaluate the pivotal role of superstar central bankers by assessing the difference an outstanding governor makes to economic...

The personalities of central bankers moved center stage during the recent financial crisis. Some central bankers even gained "superstar" status. In this paper, we evaluate the pivotal role of superstar central bankers by assessing the difference an outstanding governor makes to economic...

The personalities of central bankers moved center stage during the recent financial crisis. Some central bankers even gained "superstar" status. In this paper, we evaluate the pivotal role of superstar central bankers by assessing the difference an outstanding governor makes to economic...

After appointing Federal Reserve Chairman Powell, President Trump steadily put pressure on the Fed to cut interest rates. We show that, on average, a statement from Trump led to lower long-term interest rates, consistent with expectations of lower expected future short rates. However, the impact...

Most meetings of the Governing Council of the ECB take place intra muros at the ECB's premises in Frankfurt. Some meetings, however, are held extra muros, i.e. outside Frankfurt, hosted by one of the national central banks. This paper uses high-frequency surprises from meeting days to show that...

Monetary policy increasingly relies on steering market expectations about future policy. This paper identifies a monetary policy news shock based on a VAR model. A monetary news shock is equivalent to new information about the Fed's future monetary policy becoming available today. One example of...