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Time Consistency of Fiscal and Monetary Policy : A Solution

Persson, Mats - 2005

This paper demonstrates how time consistency of the Ramsey policy - the optimal fiscal and monetary policy under commitment - can be achieved. Each government should leave its successor with a unique maturity structure for the nominal and indexed debt, such that the marginal benefit of a...

Persistent link: https://www.econbiz.de/10012467597

Capital Flows, Investment, and Exchange Rates

Stockman, Alan C. - 1985

prices with investment and production. We use the model to calculate theoretical covariances between investment, the current … flows, exchange rates, investment, and the terms of trade are critically dependent on optimal portfolio allocations and the …

Persistent link: https://www.econbiz.de/10012477484

Does the P* Model Provide Any Rationale for Monetary Targeting?

Svensson, Lars E.O. - 2000

Eurosystem. The P* model implies that inflation is determined by the level of and changes in the 'money gap' (the deviation of … current real balances from their long-run equilibrium level), and hence that the real money gap is an important indicator for … future inflation. Nevertheless, the P* model does not seem to provide any rationale for either a Bundesbank-style money …

Persistent link: https://www.econbiz.de/10012471029

How Should Monetary Policy be Conducted in an Era of Price Stability?

Svensson, Lars E.O. - 2000

The paper discusses several issues related to how monetary policy should be conducted in an era of price stability. Low inflation (with base drift in the price level) and price-level stability (without such base drift) are compared, and a suitable loss function (corresponding to flexible...

Persistent link: https://www.econbiz.de/10012471258

Monetary Policy Issues for the Eurosystem

Svensson, Lars E.O. - 1999

implies that policy decisions are explained in terms of money-growth developments that are not essential for policy. The … monetary strategy is deficient, since it proposes a prominent role for an essentially irrelevant money-growth indicator in …

Persistent link: https://www.econbiz.de/10012471610

The Equilibrium Degree of Transparency and Control in Monetary Policy

Faust, Jon - 1999

We examine a central bank's endogenous choice of degree of control and degree of transparency, under both commitment and discretion. Under commitment, we find that the deliberate choice of sloppy control is far less likely under a standard central-bank loss function than reported for a less...

Persistent link: https://www.econbiz.de/10012471635

Inflation, Monetary Velocity, and Welfare

Krugman, Paul R. - 1982

rise to a meaningful portfolio choice between money and bonds. We show that monetary velocity is increasing in the rate of …

Persistent link: https://www.econbiz.de/10012478118

Monetary Policy Strategies for the Federal Reserve

Svensson, Lars E.O. - 2020

The general monetary policy strategy of "forecast targeting" allows the Federal Reserve to respond flexibly to all relevant information in achieving its dual mandate of maximum employment and price stability. In contrast, a simple "instrument" rule such as a Taylor-type rule restricts the...

Persistent link: https://www.econbiz.de/10012479181

Inflation Targeting

Svensson, Lars E.O. - 2010

Inflation targeting is a monetary-policy strategy that is characterized by an announced numerical inflation target, an implementation of monetary policy that gives a major role to an inflation forecast and has been called forecast targeting, and a high degree of transparency and accountability....

Persistent link: https://www.econbiz.de/10012462017

Evaluating Monetary Policy

Svensson, Lars E.O. - 2009

Evaluating inflation-targeting monetary policy is more complicated than checking whether inflation has been on target, because inflation control is imperfect and flexible inflation targeting means that deviations from target may be deliberate in order to stabilize the real economy. A modified...

Persistent link: https://www.econbiz.de/10012463265