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Speed Limit Policies: The Output Gap and Optimal Monetary Policy
Walsh, Carl - CESifo - 2001
In a standard New Keynesian model, a myopic central bank concerned with stabilizing inflation and changes in the output gap will implement a policy under discretion that replicates the optimal, timeless perspective, precommitment policy. By stabilizing output gap changes, the central bank...
Persistent link: https://www.econbiz.de/10005406008
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Hyperbolic Discounting and Positive Optimal Inflation
Graham, Liam; Snower, Dennis - CESifo - 2011
The Friedman rule states that steady-state welfare is maximized when there is deflation at the real rate of interest. Recent work by Khan et al (2003) uses a richer model but still finds deflation optimal. In an otherwise standard new Keynesian model we show that, if households have hyperbolic...
Persistent link: https://www.econbiz.de/10009024848
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Back to Keynes?
Ploeg, Frederick Van der - CESifo - 2005
After a brief review of classical, Keynesian, New Classical and New Keynesian theories of macroeconomic policy, we assess whether New Keynesian Economics captures the quintessential features stressed by J.M. Keynes. Particular attention is paid to Keynesian features omitted in New Keynesian...
Persistent link: https://www.econbiz.de/10005181517
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Outside versus Inside Bonds: A Modigliani-Miller Type Result for Liquidity Constrained Economies
Berentsen, Aleksander; Waller, Christopher - CESifo - 2010
When agents are liquidity constrained, two options exist — sell assets or borrow. We compare the allocations arising in …
Persistent link: https://www.econbiz.de/10008799751
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Interaction of Carbon Reduction and Green Energy Promotion in a Small Fossil-Fuel Importing Economy
Pethig, Rüdiger; Wittlich, Christian - CESifo - 2009
We study the incidence of carbon-reduction and green-energy promotion policies in an open fossil-fuel importing general equilibrium economy. The focus is on mixed price-based or quantity-based policies. Instruments directed toward promoting green energy are shown to reduce also carbon emissions...
Persistent link: https://www.econbiz.de/10005010149
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Tax Structure and Government Expenditures under Tax Equity Norms
Koenig, Tobias; Wagener, Andreas - CESifo - 2010
We augment a standard tax model by concerns about tax equity: people get upset when labour is taxed more heavily than capital. Even the slightest concern for tax equity invalidates the common recommendation for small open economies that capital should remain tax-exempt. This holds for exogenous...
Persistent link: https://www.econbiz.de/10008671687
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A New Two-Pillar Strategy for the ECB
Grauwe, Paul De; Gros, Daniel - CESifo - 2009
The ECB has been arguing in the past that since there is no trade-off between price stability and financial stability, the pursuit of price stability is the best a central bank can do to also maintain financial stability. We argue that there is a potential trade-off between price stability and...
Persistent link: https://www.econbiz.de/10008596592
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Volatility of Exchange Rates in Selected New EU Members: Evidence from Daily Data
Fidrmuc, Jarko; Horváth, Roman - CESifo - 2007
We examine the daily exchange rate dynamics in selected new EU member states (Czech Republic, Hungary, Poland, Romania, and Slovakia) using GARCH and TARCH models between 1999 and 2006. Despite these countries adopted inflation targeting regime, they occasionally tried to manage their exchange...
Persistent link: https://www.econbiz.de/10005765724
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Inflation Targeting by Debtor Central Banks in Emerging Market Economies
Löffler, Axel; Schnabl, Gunther; Schobert, Franziska - CESifo - 2010
to accumulate massive foreign reserves. If left unsterilized, the liquidity expansion can threaten domestic macroeconomic … stability. To contain domestic inflation these central banks absorb rather then provide liquidity in their regular monetary … surplus liquidity is less efficient, because absorbing liquidity raises the costs of monetary policy operations. By …
Persistent link: https://www.econbiz.de/10008511598
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Inflation Targeting versus Nominal Income Targeting
Staudinger, Sylvia - CESifo - 2000
In this paper we analyze flexible inflation targeting and nominal income targeting as two different monetary strategies in a simple dynamic macromodel. Furthermore we analyze inflation targeting in a two-period time-lag version of the model. The key results of our paper are: First, for both...
Persistent link: https://www.econbiz.de/10005196230