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Money as an indicator variable for monetary policy when money demand is forward looking

Kajanoja, Lauri - EconWPA - 2004

This paper studies the gain from using money as an indicator when monetary policy in made under data uncertainty. We use a forward and backward looking model, calibrated for the euro area. The policymaker cannot completely observe the state of the economy. Money reveals some of the private...

Persistent link: https://www.econbiz.de/10005126466

Should Monetary Policy Respond to Asset Price Misalignments?

Kontonikas, Alexandros; Ioannidis, Christos - EconWPA - 2004

This paper analyses the relationship between monetary policy and asset prices using a structural rational expectations model that allows for the effect of asset prices on aggregate demand. We assume that asset prices follow a partial adjustment mechanism whereas they are positively affected by...

Persistent link: https://www.econbiz.de/10005076790

Asset Prices and Monetary Policy: Some Notes

Cai, Junning - EconWPA - 2003

Three issues regarding asset prices and monetary policy are clarified. First, increases in asset prices due to monetary expansion, despite their “paper” wealth nature, tend to make current consumers as a whole wealthier. Second, the weaker (stronger) effect of monetary policy on investment...

Persistent link: https://www.econbiz.de/10005126230

Canaries and Vultures: A Quantitative History of Monetary Mismanagement in Brazil

Albuquerque, Pedro H.; Gouvea, Solange - EconWPA - 2005

considered for each plan. It is shown that the unsuccessful programs were marked by excessive liquidity. The results not only … liquidity could have been predicted. …

Persistent link: https://www.econbiz.de/10005124863

Is money informative? Evidence from a large model used for policy analysis

Altissimo, Filippo; Gaiotti, Eugenio; Locarno, Alberto - EconWPA - 2004

In this paper we assess whether monetary variables convey marginal information on the state of the Italian economy, taking as a benchmark the forecasting errors generated by the quarterly model used by the Bank of Italy in the 1990s. We follow two alternative approaches. First we map monetary...

Persistent link: https://www.econbiz.de/10005412693

"Money" is the Reserves not the Money

Woods, James - EconWPA - 2003

In this paper I will argue that the institutional implementations that we commonly include in our monetary aggregates are actually more similar to the concept of ``monetary base''. I will also argue that the institutional implementation of accounts payable operates as money. This slightly...

Persistent link: https://www.econbiz.de/10005561247

Debt-Deflation: Concepts, and a Stylised Model

Peter, Goetz von - EconWPA - 2005

This paper proposes a model of how agents adjust their asset holdings in response to losses in general equilibrium. By emphasising the relation between deflation and financial distress, we capture some original features of the early debt-deflation literature, such as distress selling,...

Persistent link: https://www.econbiz.de/10005126279

A Unified Approach to Credit Crunches, Financial Instability, and Banking Crises

Peter, Goetz von - EconWPA - 2003

We link banking and asset prices in a simple monetary macroeconomic model. Our main innovation is to consider how wide-spread default affects the banking system. We find that the interaction of credit, asset prices, and loan losses explains a complete spectrum of outcomes, including financial...

Persistent link: https://www.econbiz.de/10005412610

Asset Prices and Banking Distress: A Macroeconomic Approach

Peter, Goetz von - EconWPA - 2004

This paper links banking with asset prices in a monetary macroeconomic model. The main innovation is to consider how falling asset prices affect the banking system through wide-spread borrower default, while deriving explicit solutions and balance sheet effects even far from the steady state. We...

Persistent link: https://www.econbiz.de/10005413177

Liquidity Trap Prevention and Escape: A Simple Proposition

Cai, Junning - EconWPA - 2004

Liquidity traps occur when the natural nominal interest rate becomes negative. In a model with capital price dynamics … explicitly considered, we find that shocks in the future can cause current and lasting liquidity traps. We propose that the … central bank can prevent or fix liquidity traps by appending to its inflation-targeting monetary policy with a prioritized …

Persistent link: https://www.econbiz.de/10005561118

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