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Commercial bank capacity to pay interest on demand deposits: evidence from large weekly reporting banks

Mondschean, Thomas H.; Elijah Brewer, III - Federal Reserve Bank of Chicago - 1988

Persistent link: https://www.econbiz.de/10005514995

Optimal fiscal and monetary policy: equivalence results

Correia, Isabel; Nicolini, Juan Pablo; Teles, Pedro - Federal Reserve Bank of Chicago - 2002

In this paper, we analyze the implications of price setting restrictions for the conduct of cyclical fiscal and monetary policy. We consider an environment with monopolistic competitive firms, a shopping time technology, prices set one period in advance, and government expenditures that must be...

Persistent link: https://www.econbiz.de/10005419923

Prospective deficits and the Asian currency crisis

Burnside, Craig; Eichenbaum, Martin; Rebelo, Sergio - Federal Reserve Bank of Chicago - 1998

This paper argues that the recent Southeast Asian currency crisis was caused by large prospective deficits associated with implicit bailout guarantees to failing banking systems. We articulate this view using a simple dynamic general equilibrium model whose key feature is that a speculative...

Persistent link: https://www.econbiz.de/10005419937

Economic determinants of the nominal treasury yield curve

Evans, Charles L.; Marshall, David - Federal Reserve Bank of Chicago - 2001

find that most of the long-run variability of interest rates of all maturities is driven by macroeconomic impulses. Shocks … level of the yield curve. In contrast, technology shocks induce weaker and less robust patterns of interest rate responses … shocks induce any significant interest rate responses. …

Persistent link: https://www.econbiz.de/10005419944

Taylor rules in a limited participation model

Christiano, Lawrence J.; Gust, Christopher J. - Federal Reserve Bank of Chicago - 1999

rules for setting the rate of interest. Rules are evaluated according to their ability to protect the economy from bad … nominal interest rate more than one-for-one with a rise in inflation; and (ii) does not change the interest rate in response …

Persistent link: https://www.econbiz.de/10005419947

Expectation traps and monetary policy

Albanesi, Stefania; Chari, V.V.; Christiano, Lawrence J. - Federal Reserve Bank of Chicago - 2002

Why is it that inflation is persistently high in some periods and persistently low in other periods? We argue that lack of commitment in monetary policy may bear a large part of the blame. We show that, in a standard equilibrium model, absence of commitment leads to multiple equilibria, or...

Persistent link: https://www.econbiz.de/10005419951

Nominal rigidities and the dynamic effects of a shock to monetary policy

Christiano, Lawrence J.; Eichenbaum, Martin; Evans, … - Federal Reserve Bank of Chicago - 2001

We present a model embodying moderate amounts of nominal rigidities which accounts for the observed inertia in inflation and persistence in output. The key features of our model are those that prevent a sharp rise in marginal costs after an expansionary shock to monetary policy. Of these...

Persistent link: https://www.econbiz.de/10005419958

Nominal debt as a burden on monetary policy

Díaz-Giménez, Javier; Giovannetti, Giorgia; Marimon, Ramon - Federal Reserve Bank of Chicago - 2004

, not only because it must be serviced, but also because it creates a time inconsistency problem that distorts interest …

Persistent link: https://www.econbiz.de/10005419963

Gaps and triangles

Adão, Bernardino; Correia, Isabel; Teles, Pedro - Federal Reserve Bank of Chicago - 2001

policy instruments are the nominal interest rate and the money supply. In this environment, it is feasible to undo both the …

Persistent link: https://www.econbiz.de/10005419968

Extracting market expectations from option prices: case studies in Japanese option markets

Nakamura, Hisashi; Shiratsuka, Shigenori - Federal Reserve Bank of Chicago - 1999

This paper focuses on the recently developing financial derivatives markets, and examines the usefulness of option prices as an information variable for monetary policy implementation. A set of option prices provides us with information on the whole probability distribution of the future values...

Persistent link: https://www.econbiz.de/10005419977