Showing 1 - 10 of 145
In standard monetary models nominal interest rates should be decreased in response to a switch to a lower inflation target. This paper considers this interaction between inflation and nominal interest rates in a dynamic model of liquidity. In a repeated Diamond&Dybvig economy a financial...
Persistent link: https://www.econbiz.de/10005069331
This paper reexamines the role of open market operations for short-run effects of monetary policy in a New Keynesian framework. The central bank supplies money in exchange for securities that are discounted with the short-run nominal interest rate, while money demand is induced by a liquidity...
Persistent link: https://www.econbiz.de/10005085461
The previous literature on optimal monetary policy has focused mainly on dynamic stochastic general equilibrium models with a constant aggregate capital stock (cf. Woodford 1999; Erceg et al. 2000). In this paper, we analyze the monetary policy implications of endogenous capital accumulation. We...
Persistent link: https://www.econbiz.de/10005069489
How can a particular allocation and prices be implemented? Under what conditions does a policy deliver a unique competitive equilibrium? How many degrees of freedom there are in the determination of the policy variables, or how many are the instruments of policy? In this paper we analyze a...
Persistent link: https://www.econbiz.de/10005085431
Models where money arises due to a transactions motive imply that an increase in aggregate activity will raise the demand for money. Models where money arises due to money being the most preferred form of precautionary savings imply that a decrease in individual uncertainty will lower the demand...
Persistent link: https://www.econbiz.de/10005069512
Persistent link: https://www.econbiz.de/10004970326
The paper sets out a monetary business cycle model extended to include the production of credit that serves as an alternative to money in transactions and is subject to productivity shocks. The model provides some improvement on certain puzzles, in particular by capturing the procyclic movements...
Persistent link: https://www.econbiz.de/10004970344
This paper studies the provision of incentives to reallocate capital when managers are reluctant to relinquish control and have private information about the productivity of assets under their control. We show that when managers get private benefits from running projects substantial bonuses are...
Persistent link: https://www.econbiz.de/10004970357
This paper combines default, settlement, and repayment history into a unified, dynamic borrowing model of sovereign debt. The model addresses two questions: 1) how the level of debt and the income profile affect the length of time a country in default is excluded from the international credit...
Persistent link: https://www.econbiz.de/10004977907
Persistent link: https://www.econbiz.de/10004977949