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Cieślak, Anna; Hansen, Stephen; McMahon, Michael; … - National Bureau of Economic Research - 2023

Uncertainty is a ubiquitous concern emphasized by policymakers. We study how uncertainty affects decision-making by the … Federal Open Market Committee (FOMC). We distinguish between the notion of Fed-managed uncertainty vis-a-vis uncertainty that …-managed uncertainty introduces a wedge between the standard Taylor-type policy rule and the optimal decision. Using private Fed …

Persistent link: https://www.econbiz.de/10014436980

Dynamic Programming on a Quantum Annealer : Solving the RBC Model

Fernández-Villaverde, Jesús; Hull, Isaiah J. - National Bureau of Economic Research - 2023

We introduce a novel approach to solving dynamic programming problems, such as those in many economic models, on a quantum annealer, a specialized device that performs combinatorial optimization. Quantum annealers attempt to solve an NP-hard problem by starting in a quantum superposition of all...

Persistent link: https://www.econbiz.de/10014322714

Trade Wars and the Optimal Design of Monetary Rules

Auray, Stéphane; Devereux, Michael B.; Eyquem, Aurélien - National Bureau of Economic Research - 2024

Monetary rules may have a large effect on the outcome of trade wars if central banks target the CPI inflation rate or more generally changes in the relative price of traded goods. We lay out a two-country open-economy model with sticky prices where countries engage in trade wars. In the presence...

Persistent link: https://www.econbiz.de/10014544729

Helicopter Drops and Liquidity Traps

Amador, Manuel; Bianchi, Javier - National Bureau of Economic Research - 2023

We show that if the central bank operates without commitment and faces constraints on its balance sheet, helicopter drops can be a useful stabilization tool during a liquidity trap. With commitment, even with balance sheet constraints, helicopter drops are irrelevant

Persistent link: https://www.econbiz.de/10014247967