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Fiscal Policy: Its Macroeconomics in Perspective

Tobin, James - Cowles Foundation for Research in Economics, Yale University - 2001

President George W. Bush is preparing a drastic permanent reduction in federal income and estate taxes. He cites as precedents tax cuts by Kennedy-Johnson 1962-64 and Reagan 1981. In those cases, however, the economy was operating well below full employment and needed a "demand-side" stimulus...

Persistent link: https://www.econbiz.de/10005762666

Evaluating Inflation Targeting Using a Macroeconometric Model

Fair, Ray C. - Cowles Foundation for Research in Economics, Yale University - 2006

This paper uses a structurally estimated macroeconometric model, denoted the MC model, to evaluate inflation targeting in the United States. Various interest rate rules are tried with differing weights on inflation and output, and various optimal control problems are solved using differing...

Persistent link: https://www.econbiz.de/10005463890

Understanding Inflation-Indexed Bond Markets

Campbell, John Y.; Shiller, Robert J.; Viceira, Luis M. - Cowles Foundation for Research in Economics, Yale University - 2009

rates, bond risks, and liquidity explain the trends before 2008 and the unusual developments in the fall of 2008. Low …

Persistent link: https://www.econbiz.de/10004999551

Money and Production, and Liquidity Trap

Dubey, Pradeep; Geanakoplos, John - Cowles Foundation for Research in Economics, Yale University - 2006

, then the economy will fall into a liquidity trap today. …

Persistent link: https://www.econbiz.de/10005762579

Liquidity, Default and Crashes: Endogenous Contracts in General Equilibrium

Geanakoplos, John - Cowles Foundation for Research in Economics, Yale University - 2001

The possibility of default limits available liquidity. If the potential default draws nearer, a liquidity crisis may … endogenous contracts, including endogenous margin requirements on loans. This in turn allows GE to explain liquidity and … liquidity crises in equilibrium. A formal definition of liquidity is presented. When new information raises the probability and …

Persistent link: https://www.econbiz.de/10005593327

Low Interest Rates and High Asset Prices: An Interpretation in Terms of Changing Popular Models

Shiller, Robert J. - Cowles Foundation for Research in Economics, Yale University - 2007

There has been a widespread perception in the past few years that long-term asset prices are generally high because monetary authorities have effectively kept long-term interest rates, which the market uses to discount cash flows, low. This perception is not accurate. Long-term interest rates...

Persistent link: https://www.econbiz.de/10005593652

Liquidity Black Holes

Morris, Stephen; Shin, Hyun Song - Cowles Foundation for Research in Economics, Yale University - 2003

run are generated. A "liquidity black hole" is the analogue of the run outcome in a bank run model. Short horizon traders … liquidity black hole comes into existence. Empirical implications include the sharp V-shaped pattern in prices around the time … of the liquidity black hole. …

Persistent link: https://www.econbiz.de/10005463975

Liquidity, Default and Crashes: Endogenous Contracts in General Equilibrium

Geanakoplos, John - Cowles Foundation for Research in Economics, Yale University - 2001

contracts, including endogenous margin requirements on loans. This in turn allows GE to explain liquidity and liquidity crises … in equilibrium. A formal definition of liquidity is presented. When new information raises the probability a fixed income …

Persistent link: https://www.econbiz.de/10004990661

Missing Aggregate Dynamics: On the Slow Convergence of Lumpy Adjustment Models

Caballero, Ricardo J.; Engel, Eduardo M.R.A. - Cowles Foundation for Research in Economics, Yale University - 2003

The dynamic response of aggregate variables to shocks is one of the central concerns of applied macroeconomics. The main measurement procedure for these dynamics consists of estimmiating an ARMA or VAR (VARs, for short). In non- or semi-structural approaches, the characterization of dynamics...

Persistent link: https://www.econbiz.de/10005762701

On Modeling the Effects of Inflation Shocks

Fair, Ray C. - Cowles Foundation for Research in Economics, Yale University - 2001

A popular model in the literature postulates an interest rate rule, a NAIRU price equation, and an aggregate demand equation in which aggregate demand depends on the real interest rate. In this model a positive inflation shock with the nominal interest rate held constant is explosive because it...

Persistent link: https://www.econbiz.de/10005762840