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Monetary Policy Uncertainty and Economic Fluctuations

Creal, Drew D. - 2014

We investigate the relationship between uncertainty about monetary policy and its transmission mechanism, and economic …-order effect on their dynamics. The data favors a model with two unspanned volatility factors that capture uncertainty about … monetary policy and the term premium. Uncertainty contributes negatively to economic activity. Two dimensions of uncertainty …

Persistent link: https://www.econbiz.de/10012458071

The Four Equation New Keynesian Model

Sims, Eric R. - 2019

This paper develops a New Keynesian model featuring financial intermediation, short and long term bonds, credit shocks, and scope for unconventional monetary policy. The log-linearized model reduces to four key equations - a Phillips curve, an IS equation, and policy rules for the short term...

Persistent link: https://www.econbiz.de/10012480015

Global Effective Lower Bound and Unconventional Monetary Policy

Wu, Jing Cynthia - 2018

In a standard open-economy New Keynesian model, the effective lower bound causes anomalies: output and terms of trade respond to a supply shock in the opposite direction compared to normal times. We introduce a tractable two-country model to accommodate for unconventional monetary policy. In our...

Persistent link: https://www.econbiz.de/10012453006

Inflation Announcements and Social Dynamics

Hachem, Kinda - 2014

We propose a new framework for understanding the effectiveness of central bank announcements when firms have heterogeneous inflation expectations. Expectations are updated through social dynamics and, with heterogeneity, not all firms choose to operate, putting downward pressure on realized...

Persistent link: https://www.econbiz.de/10012458503

Measuring the Macroeconomic Impact of Monetary Policy at the Zero Lower Bound

Wu, Jing Cynthia - 2014

This paper employs an approximation that makes a nonlinear term structure model extremely tractable for analysis of an economy operating near the zero lower bound for interest rates. We show that such a model offers an excellent description of the data compared to the benchmark model and can be...

Persistent link: https://www.econbiz.de/10012458549

The Effectiveness of Alternative Monetary Policy Tools in a Zero Lower Bound Environment

Hamilton, James D. - 2011

This paper reviews alternative options for monetary policy when the short-term interest rate is at the zero lower bound and develops new empirical estimates of the effects of the maturity structure of publicly held debt on the term structure of interest rates. We use a model of risk-averse...

Persistent link: https://www.econbiz.de/10012461701