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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

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

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

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

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

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

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

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

Early Warning System for Economic and Financial Risks in Kazakhstan

Bhattacharyay, Biswa N.; Dlugosch, Dennis; Kolb, Benedikt; … - CESifo - 2009

This paper proposes a macro-prudential financial soundness analysis that can be used by most developing and transformation countries with or without crisis experience as well as by developed countries with limited data. The objective is to detect economic and financial sector vulnerability,...

Persistent link: https://www.econbiz.de/10008534036

Towards a Macroprudential Surveillance and Remedial Policy Formulation System for Monitoring Financial Crisis

Bhattacharyay, Biswa N. - CESifo - 2009

Several developing economies witnessed a large number of systemic financial and currency crises since the 1980s which resulted in severe economic, social, and political problems. The devastating impact of the 1982 and 1994-95 Mexican crises, the 1997-98 Asian financial crisis, the 1998 Russian...

Persistent link: https://www.econbiz.de/10008583704