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Escaping from a Combination of Liquidity Trap and Credit Crunch
Heinemann, Frank - CESifo - 2008
, consequences, and some alternatives. It is meant as a policy suggestion in case the recapitalization of banks, agreed upon in mid …
Persistent link: https://www.econbiz.de/10005765775
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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
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Fiscal Transfers in a Monetary Union with Exit Option
Hefeker, Carsten; Neugart, Michael - CESifo - 2015
It is widely debated whether a monetary union has to be accompanied by a fiscal transfer scheme to accommodate asymmetric shocks. We build a model of a monetary union with a central bank and two heterogeneous countries that are linked by a fiscal transfer scheme with repercussions on monetary...
Persistent link: https://www.econbiz.de/10011202966
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Economic Policy Uncertainty, Trust and Inflation Expectations
Istrefi, Klodiana; Piloiu, Anamaria - CESifo - 2013
Theory and evidence suggest that in an environment of well-anchored expectations, temporary news or shocks to economic variables, should not affect agents’ expectations of inflation in the long term. Our estimated structural VARs show that both long- and short-term inflation expectations are...
Persistent link: https://www.econbiz.de/10010670794
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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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The Role of Political Institutions for the Effectiveness of Central Bank Independence
Hielscher, Kai; Markwardt, Gunther - CESifo - 2011
This paper empirically studies the impact of the quality of political institutions on the link between central bank independence and inflation. Making use of data on the evolution of central bank independence over time and controlling for possible nonlinearities, we employ interaction models to...
Persistent link: https://www.econbiz.de/10008914290
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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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Asset Price Shocks, Real Expenditures, and Financial Structure: A Multi-Country Analysis
Chirinko, Robert S.; Haan, Leo de; Sterken, Elmer - CESifo - 2008
This paper examines the responses of private consumption, residential investment, and business investment in 11 EU countries, Japan, and the United States to shocks in housing and equity prices. The effects are assessed with a Structural Vector Auto Regressive (SVAR) model, and four key findings...
Persistent link: https://www.econbiz.de/10005196187
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Resolving the Spanning Puzzle in Macro-Finance Term Structure Models
Bauer, Michael D.; Rudebusch, Glenn D. - CESifo - 2015
Previous macro-finance term structure models (MTSMs) imply that macroeconomic state variables are spanned by (i.e., perfectly correlated with) model-implied bond yields. However, this theoretical implication appears inconsistent with regressions showing that much macroeconomic variation is...
Persistent link: https://www.econbiz.de/10011155372
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Transparency, Flexibility and Macroeconomic Stabilization
Geraats, Petra - CESifo - 2014
Many central banks have become more transparent during the last decade, in particular about macroeconomic prospects …. This paper shows that such economic transparency could give central banks greater flexibility to respond to macroeconomic … shocks. In particular, it allows central banks to stabilize aggregate demand and supply shocks without affecting private …
Persistent link: https://www.econbiz.de/10010877697