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Forward Guidance in a Simple Model with a Zero Lower Bound

Illing, Gerhard; Siemsen, Thomas - CESifo - 2014

the role of long-run and short-run price stickiness under discretion and commitment in a straightforward and intuitive way …. Despite the impact of price rigidity on welfare being non-linear, losses under discretion are lowest with perfectly flexible … when a commitment to hold nominal rates at zero for an extended period is optimal. We then introduce government spending …

Persistent link: https://www.econbiz.de/10010877957

Inflation Targeting by Debtor Central Banks in Emerging Market Economies

Löffler, Axel; Schnabl, Gunther; Schobert, Franziska - CESifo - 2010

Given buoyant capital inflows and managed exchange rates the majority of emerging market central banks have continued to accumulate massive foreign reserves. If left unsterilized, the liquidity expansion can threaten domestic macroeconomic stability. To contain domestic inflation these central...

Persistent link: https://www.econbiz.de/10008511598

Structural Distortions and Decentralized Fiscal Policies in EMU

Beetsma, Roel; Bovenberg, Lans - CESifo - 2001

The combination of discretionary monetary policy, labor-market distortions and nominal wage rigidity yields an inflation bias as monetary policy tries to exploit nominal wage contracts to address labour-market distortions Although an inflation target eliminates this inflation bias, it creates a...

Persistent link: https://www.econbiz.de/10005765964

Sovereign Default Risk and Banks in a Monetary Union

Uhlig, Harald - CESifo - 2013

This paper seeks to understand the interplay between banks, bank regulation, sovereign default risk and central bank guarantees in a monetary union. I assume that banks can use sovereign bonds for repurchase agreements with a common central bank, and that their sovereign partially backs up any...

Persistent link: https://www.econbiz.de/10010877795

Fiscal Multipliers and the Choice of Zero Lower Bound Modeling

Siemsen, Thomas; Watzka, Sebastian - CESifo - 2013

In this note we elaborate on the effect of the modeling choice of the zero lower bound on the size of the fiscal multiplier. To this end we contrast two different ways to implement the ZLB in a New Keynesian model: the ZLB modeled as an endogenous central bank reaction to a contractionary demand...

Persistent link: https://www.econbiz.de/10010681227

A Role Model for China? Exchange Rate Flexibility and Monetary Policy in Japan

Schnabl, Gunther; Danne, Christian - CESifo - 2007

Few papers have tried to project how Chinese monetary policy will behave under flexible exchange rates. As Japan provides an important role model for China, this paper studies the role of the yen/dollar exchange rate for Japanese monetary policy after the shift of Japan from a fixed to a...

Persistent link: https://www.econbiz.de/10005405989

Inflation Targets Versus International Monetary Integration - A Canadian Perspective

Laidler, David - CESifo - 2002

The debate about Canadian-U.S. monetary integration is surveyed. The choice is among overall monetary orders,rather than exchange rate regimes and questions of policy credibility and political accountability are crucial. Canada’s recent economic performance under inflation targets, and...

Persistent link: https://www.econbiz.de/10005406116

Does Money Matter in the ECB Strategy? New Evidence Based on ECB Communication

Berger, Helge; Sturm, Jan-Egbert - CESifo - 2006

We examine the role of money in the policies of the ECB, using introductory statements of the ECB President at the monthly press conferences during 1999-2004. Over time, the relative amount of words devoted to the monetary analysis has decreased. Our analysis of indicators of the monetary policy...

Persistent link: https://www.econbiz.de/10005406390

The Stress of Having a Single Monetary Policy in Europe

Sturm, Jan-Egbert; Wollmershäuser, Timo - CESifo - 2008

This paper estimates forward-looking Taylor rules for the euro area. Using the asymmetries in inflation and cyclical output developments across countries, we investigate the adequacy of the single monetary policy for each of the European Monetary Union (EMU) member countries. Notable differences...

Persistent link: https://www.econbiz.de/10005406450

Bank Behavior and the Cost Channel of Monetary Transmission

Hülsewig, Oliver; Mayer, Eric; Wollmershäuser, Timo - CESifo - 2006

This paper presents a New Keynesian model that dwells on the role of banks in the cost channel of monetary policy. Banks extend loans to firms in an environment of monopolistic competition by setting the loan rate according to a Calvo-type staggered price setting approach, which means that the...

Persistent link: https://www.econbiz.de/10005416507