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Modeling Two Macro Policy Instruments - Interest Rates and Aggregate Capital Requirements
Gersbach, Hans; Hahn, Volker - CESifo - 2011
We present a simple neoclassical model to explore how an aggregate bank-capital requirement can be used as a macroeconomic policy tool and how this additional tool interacts with monetary policy. Aggregate bank-capital requirements should be adjusted when the economy is hit by cost-push shocks...
Persistent link: https://www.econbiz.de/10009320780
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Are there Differences in the Effectiveness of Quantitative Easing at the Zero-Lower-Bound in Japan over Time?
Michaelis, Henrike; Watzka, Sebastian - CESifo - 2014
Using a time-varying parameter vector autoregression (TVP-VAR) with a new sign restriction framework, we study the changing effectiveness of the Bank of Japan’s Quantitative Easing policies over time. We analyse the Zero-Interest Rate Policy from 1999 to 2000, the Quantitative Easing Policy...
Persistent link: https://www.econbiz.de/10010812488
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Liquidity, Term Spreads and Monetary Policy
Aksoy, Yunus; Basso, Henrique S. - CESifo - 2012
affect their ability to cover for any liquidity needs and hence influence the premium banks require to carry the maturity … the central bank after a liquidity shock creates a new channel of policy transmission that leads to a sharp decrease in … responses after a liquidity shock. The short-term rate does not need to decrease as much as when only conventional policies are …
Persistent link: https://www.econbiz.de/10010690388
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Escaping from a Combination of Liquidity Trap and Credit Crunch
Heinemann, Frank - CESifo - 2008
order to escape the current combination of liquidity trap and credit crunch. It shortly discusses reasons for this measure …
Persistent link: https://www.econbiz.de/10005765775
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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
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Optimal Monetary Policy when Agents are Learning
Molnár, Krisztina; Santoro, Sergio - CESifo - 2010
We derive the optimal monetary policy in a sticky price model when private agents follow adaptive learning. We show that this slight departure from rationality has important implications for policy design. The central bank faces a new intertemporal trade-off, not present under rational...
Persistent link: https://www.econbiz.de/10008596587
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On the Perils of Stabilizing Prices when Agents are Learning
Mele, Antonio; Molnár, Krisztina; Santoro, Sergio - CESifo - 2015
We show that price level stabilization is not optimal in an economy where agents have incomplete knowledge about the policy implemented and try to learn it. A systematically more accommodative policy than what agents expect generates short term gains without triggering an abrupt loss of...
Persistent link: https://www.econbiz.de/10011155373
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The Relevance or Otherwise of the Central Bank's Balance Sheet
Miles, David K.; Schanz, Jochen - CESifo - 2014
This paper explores the impacts on an economy of a central bank changing the size and composition of its balance sheet. One of the ways in which such asset purchases could influence prices and demand is via portfolio balance effects. We develop and calibrate a simple OLG model in which...
Persistent link: https://www.econbiz.de/10010739346
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Smells Like Fiscal Policy? Assessing the Potential Effectiveness of the ECB's OMT Program
Hristov, Nikolay; Hülsewig, Oliver; Siemsen, Thomas; … - CESifo - 2014
This paper explores the potential effectiveness of the ECB’s Outright Monetary Transaction (OMT) program in safeguarding an appropriate monetary policy transmission. Since the program aims at manipulating bank lending rates by conducting sovereign bond purchases on secondary markets, a stable...
Persistent link: https://www.econbiz.de/10010877947
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Political Booms, Financial Crises
Herrera, Helios; Ordonez, Guillermo; Trebesch, Christoph - CESifo - 2014
We show that political booms, measured by the rise in governments’ popularity, predict financial crises above and beyond other better-known early warning indicators, such as credit booms. This predictive power, however, only holds in emerging economies. We show that governments in emerging...
Persistent link: https://www.econbiz.de/10010888458