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The Zero-Interest Rate Bound and the Role of the Exchange Rate for Monetary Policy in Japan

Coenen, Günter; Wieland, Volker - C.E.P.R. Discussion Papers - 2003

In this Paper we study the role of the exchange rate in conducting monetary policy in an economy with near-zero nominal interest rates as experienced in Japan since the mid-1990s. Our analysis is based on an estimated model of Japan, the United States and the euro area with rational expectations...

Persistent link: https://www.econbiz.de/10005788995

A Small Estimated Euro Area Model with Rational Expectations and Nominal Rigidities

Coenen, Günter; Wieland, Volker - C.E.P.R. Discussion Papers - 2002

In this Paper we estimate a small model of the Euro area to be used as a laboratory for evaluating the performance of alternative monetary policy strategies. We start with the relationship between output and inflation and investigate the fit of the nominal wage contracting model due to Taylor...

Persistent link: https://www.econbiz.de/10005791867

A Quantitative Exploration of the Opportunistic Approach to Disinflation

Aksoy, Yunus; Orphanides, Athanasios; Small, David; … - C.E.P.R. Discussion Papers - 2003

This Paper explores the quantitative implications of an approach to monetary policy that gained prominence in the United States during the 1990s. Proponents of this approach recommend that, when inflation is moderate but still above the long-run objective, the central bank should not move...

Persistent link: https://www.econbiz.de/10005123544

Price Stability and Monetary Policy Effectiveness when Nominal Interest Rates are Bounded at Zero

Coenen, Günter; Orphanides, Athanasios; Wieland, Volker - C.E.P.R. Discussion Papers - 2003

This Paper employs stochastic simulations of a small structural rational expectations model to investigate the consequences of the zero bound on nominal interest rates. We find that if the economy is subject to stochastic shocks similar in magnitude to those experienced in the US over the 1980s...

Persistent link: https://www.econbiz.de/10005123657

Monetary Misconceptions: New and Old Paradigmata and Other Sad Tales

Buiter, Willem H. - C.E.P.R. Discussion Papers - 2000

Several recent studies imply that the response of national saving to fiscal policy is non-monotonic. In this paper, we use two data sets to search for the circumstances in which such non-monotonic responses arise: one refers to a sample of OECD countries, as in previous studies, and one to a...

Persistent link: https://www.econbiz.de/10005124252

Data Uncertainty and the Role of Money as an Information Variable for Monetary Policy

Coenen, Günter; Levin, Andrew; Wieland, Volker - C.E.P.R. Discussion Papers - 2003

that monetary aggregates have a potentially significant role in providing information about current real output. We then … proceed to analyse the information content of money in a forward-looking model in which monetary policy is optimally … determined subject to incomplete information about the true state of the economy. We show that monetary aggregates may have …

Persistent link: https://www.econbiz.de/10005661786

When Can Central Banks Anchor Expectations? Policy communication and controllability

Acocella, Nicola; Di Bartolomeo, Giovanni; Hughes … - C.E.P.R. Discussion Papers - 2008

Rational expectations are often used as a strong argument against policy activism, as they may undermine or neutralize the policymaker’s actions. Although this sometimes happens, rational expectations do not always imply policy invariance or ineffectiveness. In fact, in certain circumstances...

Persistent link: https://www.econbiz.de/10005661866

What We Don't Know About the Monetary Transmission Mechanism and Why We Don't Know It

Beyer, Andreas; Farmer, Roger E A - C.E.P.R. Discussion Papers - 2004

We study identification in a class of linear rational expectations models. For any given exactly identified model, we provide an algorithm that generates a class of equivalent models that have the same reduced form. We use our algorithm to show that a model proposed by Benhabib and Farmer [1] is...

Persistent link: https://www.econbiz.de/10005124235

Delegation of Monetary Policy: More than a Relocation of the Time-Inconsistency Problem

Driffill, John; Rotondi, Zeno - C.E.P.R. Discussion Papers - 2003

It has been argued that delegation of monetary policy to an independent central bank, which acts as an agent for the government, does not mitigate the problem of time-inconsistency, but merely relocates it. We argue here that this is not so, and that delegation enables a wider class of economies...

Persistent link: https://www.econbiz.de/10005656362

Delegating Optimal Monetary Policy Inertia

Bilbiie, Florin Ovidiu - C.E.P.R. Discussion Papers - 2009

This paper shows that absent a commitment technology, central banks can nevertheless achieve the (timeless-)optimal commitment equilibrium if they are delegated with an objective function that is different from the societal one. In a prototypical forward-looking New Keynesian model, I develop a...

Persistent link: https://www.econbiz.de/10008459765

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