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Chapter 14. Optimal Monetary Stabilization Policy
Woodford, Michael - In: Handbook of monetary economics : volume 3, (pp. 723-828). 2010
This chapter reviews the theory of optimal monetary stabilization policy in New Keynesian models, with particular …
Persistent link: https://www.econbiz.de/10014025628
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Fiscal Histories
Cochrane, John H. - National Bureau of Economic Research - 2022
The fiscal theory states that inflation adjusts so that the real value of government debt equals the present value of … fiscal theory to interpret historical episodes, including the rise and fall of inflation in the 1970s and 1980s, the long … pegs, the ends of hyperinflations, currency crashes, and the success of inflation targets. Going forward, fiscal theory …
Persistent link: https://www.econbiz.de/10013361983
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Interest rate persistence and monetary policy rule in light of model uncertainty
Yin, Shou-Yung; Lin, Chang-Ching; Chang, Ming-Jen - In: German economic review : GER 24 (2023) 2, pp. 145-190
Persistent link: https://www.econbiz.de/10014288261
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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
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The value of constraints on discretionary government policy
Martin, Fernando M. - 2016
This paper investigates how institutional constraints discipline the behavior of discretionary governments subject to an expenditure bias. The focus is on constraints implemented in actual economies: monetary policy targets, limits on the deficit and debt ceilings. For a variety of aggregate...
Persistent link: https://www.econbiz.de/10011585839
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Five-Equation Macroeconomics: A Simple View of the Interactions Between Fiscal Policy and Monetary Policy
Kirsanova, Tatiana; Stehn, Sven Jari; Vines, David - C.E.P.R. Discussion Papers - 2006
This paper studies the interactions of fiscal and monetary policy when they stabilise a single economy against shocks in a dynamic setting. We assume that fiscal and monetary policies both stabilise the economy only by causing changes to aggregate demand. Our findings are as follows. If the both...
Persistent link: https://www.econbiz.de/10005656218
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Debt Stabilisation Bias and the Taylor Principle: Optimal Policy in a New Keynesian Model with Government Debt and Inflation Persistence
Stehn, Sven Jari; Vines, David - C.E.P.R. Discussion Papers - 2008
Leith and Wren-Lewis (2007) have shown that government debt is returned to its pre-shock level in a New Keynesian model under optimal discretionary policy. This has two important implications for monetary and fiscal policy. First, in a high-debt economy, it may be optimal for discretionary...
Persistent link: https://www.econbiz.de/10005666963
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Investment and forward-looking monetary policy : a Wicksellian solution to the problem of indeterminacy
McKnight, Stephen - In: Macroeconomic dynamics 22 (2018) 5, pp. 1345-1369
Persistent link: https://www.econbiz.de/10011916969
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A simple and flexible alternative to Stability and Growth Pact deficit ceilings. Is it at hand?
Muscatelli, Vito A.; Natale, Piergiovanna; Tirelli, Patrizio - In: European Journal of Political Economy 28 (2012) 1, pp. 14-26
We model a monetary union where fiscal discretion generates excessive debt accumulation in steady state and inefficiently delayed debt adjustment following shocks. By setting a debt target and raising the political cost of deviating from the optimal pace of debt reversal¸ institutional design...
Persistent link: https://www.econbiz.de/10011056280
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Building a financial conditions index for the euro area and selected euro area countries: What does it tell us about the crisis?
Angelopoulou, Eleni; Balfoussia, Hiona; Gibson, Heather D. - In: Economic Modelling 38 (2014) C, pp. 392-403
In this paper we construct financial conditions indices (FCIs) for the euro area, for the period 2003 to 2011, using a wide range of prices, quantities, spreads and survey data, grounded in the theoretical literature. One FCI includes monetary policy variables, whilst two versions without...
Persistent link: https://www.econbiz.de/10010753359