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Bullard, James B.; Evans, George W.; Honkapohja, Seppo - Federal Reserve Bank of St. Louis - 2004

monetary policy framework. Inclusion of judgement in forecasts can lead to self-fulfilling fluctuations, but without the …

Persistent link: https://www.econbiz.de/10005707643

Expectations, Deflation Traps and Macroeconomic Policy

Evans, George W.; Honkapohja, Seppo - C.E.P.R. Discussion Papers - 2009

We examine global economic dynamics under infinite-horizon learning in a New Keynesian model in which the interest-rate rule is subject to the zero lower bound. As in Evans, Guse and Honkapohja (2008), we find that under normal monetary and fiscal policy the intended steady state is locally but...

Persistent link: https://www.econbiz.de/10005048553

Liquidity Traps, Learning and Stagnation

Evans, George W.; Guse, Eran; Honkapohja, Seppo - C.E.P.R. Discussion Papers - 2007

We examine global economic dynamics under learning in a New Keynesian model in which the interest-rate rule is subject to the zero lower bound. Under normal monetary and fiscal policy, the intended steady state is locally but not globally stable. Large pessimistic shocks to expectations can lead...

Persistent link: https://www.econbiz.de/10005497854

Liquidity Traps and Expectation Dynamics: Fiscal Stimulus or Fiscal Austerity?

Benhabib, Jess; Evans, George W.; Honkapohja, Seppo - C.E.P.R. Discussion Papers - 2012

We examine global dynamics under infinite-horizon learning in New Keynesian models where the interest-rate rule is subject to the zero lower bound. As in Evans, Guse and Honkapohja (2008), the intended steady state is locally but not globally stable. Unstable deflationary paths emerge after...

Persistent link: https://www.econbiz.de/10011083804

Government Deficits and Speculation

Honkapohja, Seppo; Lempinen, Urho - C.E.P.R. Discussion Papers - 1987

the commodity and money markets. In this way portfolio aspects are introduced into a dynamic macro model which has many … features from growth theory. Money holdings are modelled through a simple cash-in-advance constraint and all the assets are … anticipations about some money-financed fiscal policies. As the analytically simplest case we study the effects of temporary taxes …

Persistent link: https://www.econbiz.de/10005666980

Expectations, Learning and Monetary Policy: An Overview of Recent Rersearch

Evans, George W.; Honkapohja, Seppo - C.E.P.R. Discussion Papers - 2008

Expectations about the future are central for determination of current macroeconomic outcomes and the formulation of monetary policy. Recent literature has explored ways for supplementing the benchmark of rational expectations with explicit models of expectations formation that rely on...

Persistent link: https://www.econbiz.de/10005666454

Comparing Inflation and Price Level Targeting: the Role of Forward Guidance and Transparency

Honkapohja, Seppo; Mitra, Kaushik - C.E.P.R. Discussion Papers - 2015

We examine global dynamics under learning in New Keynesian models with price level targeting that is subject to the zero lower bound. The role of forward guidance is analyzed under transparency about the policy rule. Properties of transparent and non-transparent regimes are compared to each...

Persistent link: https://www.econbiz.de/10011213315

A model of near-rational exuberance

Bullard, James B.; Evans, George W.; Honkapohja, Seppo - Federal Reserve Bank of St. Louis - 2007

We study how the use of judgment or "add-factors" in 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 a standard self-referential environment....

Persistent link: https://www.econbiz.de/10005352864

Monetary policy, judgment and near-rational exuberance

Bullard, James B.; Evans, George W.; Honkapohja, Seppo - Federal Reserve Bank of St. Louis - 2007

-fulfilling fluctuations in a subset of the determinacy region. We study how policymakers can minimize the risk of exuberance equilibria. …

Persistent link: https://www.econbiz.de/10005352949

Friedman’s money supply rule vs optimal interest rate policy

Evans, George W.; Honkapohja, Seppo - EconWPA - 2004

Using New Keynesian models, we compare Friedman’s k-percent money supply rule to optimal interest rate setting, with …

Persistent link: https://www.econbiz.de/10005126422