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A note on uniqueness in game-theoretic foundations of the reactive equilibrium

Mimra, Wanda; Wambach, Achim - Center for Financial Studies - 2014

Riley (1979)'s reactive equilibrium concept addresses problems of equilibrium existence in competitive markets with adverse selection. The game-theoretic interpretation of the reactive equilibrium concept in Engers and Fernandez (1987) yields the Rothschild-Stiglitz (1976)/Riley (1979)...

Persistent link: https://www.econbiz.de/10010961635

Risks to price stability, the zero lower bound and forward guidance: A real-time assessment

Coenen, Günter; Warne, Anders - Center for Financial Studies - 2013

price stability in the euro area during the recent financial crisis. Using a formal measure of the balance of risks, which … is derived from policy-makers' preferences about inflation outcomes, we first show that downside risks to price stability … to keep interest rates low for longer can be successful in mitigating downside risks to price stability. However, we find …

Persistent link: https://www.econbiz.de/10010986359

Price stability and monetary policy effectiveness when nominal interest rates are bounded at zero

Coenen, Günter; Orphanides, Athanasios; Wieland, Volker - Center for Financial Studies - 2003

This paper employs stochastic simulations of a small structural rational expectations model to investigate the consequences of the zero bound on nominal interest rates. We find that if the economy is subject to stochastic shocks similar in magnitude to those experienced in the U.S. over the...

Persistent link: https://www.econbiz.de/10010986364

Regional inflation dynamics within and across euro area countries and a comparison with the US

Beck, Günter W.; Hubrich, Kirstin; Marcellino, Massimiliano - Center for Financial Studies - 2006

We investigate co-movements and heterogeneity in inflation dynamics of different regions within and across euro area countries using a novel disaggregate dataset to improve the understanding of inflation differentials in the European Monetary Union. We employ a model where regional inflation...

Persistent link: https://www.econbiz.de/10010986373

Inflation rate dispersion and convergence in monetary and economic unions: lessons for the ECB

Weber, Axel A.; Beck, Günter W. - Center for Financial Studies - 2005

Using a set of regional inflation rates we examine the dynamics of inflation dispersion within the U.S.A., Japan and across U.S. and Canadian regions. We find that inflation rate dispersion is significant throughout the sample period in all three samples. Based on methods applied in the...

Persistent link: https://www.econbiz.de/10010986384

Opting out of the great inflation: German monetary policy after the break down of Bretton Woods

Beyer, Andreas; Gaspar, Vítor; Gerberding, Christina; … - Center for Financial Studies - 2008

During the turbulent 1970s and 1980s the Bundesbank established an outstanding reputation in the world of central banking. Germany achieved a high degree of domestic stability and provided safe haven for investors in times of turmoil in the international financial system. Eventually the...

Persistent link: https://www.econbiz.de/10010986410

A quantitative exploration of the opportunistic approach to disinflation

Aksoy, Yunus; Orphanides, Athanasios; Small, David; … - Center for Financial Studies - 2005

Under a conventional policy rule, a central bank adjusts its policy rate linearly according to the gap between inflation and its target, and the gap between output and its potential. Under the opportunistic approach to disinflation a central bank controls inflation aggressively when inflation is...

Persistent link: https://www.econbiz.de/10010986427

Exchange-rate policy and the zero bound on nominal interest

Wieland, Volker; Coenen, Günter - Center for Financial Studies - 2004

-rate peg and price-level targeting. We conduct this quantitative comparison in an empirical macroeconometric model of Japan … under full credibility of monetary policy. However, price-level targeting may be less effective under imperfect credibility …, because the announced price-level target path is not directly observable. …

Persistent link: https://www.econbiz.de/10010986434

Price stability, inflation convergence and diversity in EMU: Does one size fit all?

Weber, Axel A.; Beck, Günter W. - Center for Financial Studies - 2005

Using a unique data set of regional inflation rates we are examining the extent and dynamics of inflation dispersion in major EMU countries before and after the introduction of the euro. For both periods, we find strong evidence in favor of mean reversion (?-convergence) in inflation rates....

Persistent link: https://www.econbiz.de/10010986440

A Small Estimated Euro Area Model with Rational Expectations and Nominal Rigidities

Coenen, Guenter; Wieland, Volker - Center for Financial Studies - 2003

In this paper we estimate a small model of the euro area to be used as a laboratory for evaluating the performance of alternative monetary policy strategies. We start with the relationship between output and inflation and investigate the fit of the nominal wage contracting model due to Taylor...

Persistent link: https://www.econbiz.de/10010986466