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inflation have changed several times. Each of the changes in the measures of money was sparked by a breakdown in the fit of … empirical money demand functions. The Federal Reserve's strategy following these breakdowns has been to redefine money by simply … empirically stable money demand function. Unfortunately, while a stable demand for money is a worthwhile ultimate goal, history …
Persistent link: https://www.econbiz.de/10005410685
I study a model of multiple currencies in which sellers can choose the currency they will accept. I provide conditions that are necessary and sufficient to avoid indeterminacy of the exchange rate. Under these assumptions, all stable equilibria have the property that all sellers in the same...
Persistent link: https://www.econbiz.de/10005410688
Does an inflation conservative central bank à la Rogoff (1985) remain desirable in a setting with endogenous fiscal policy? To provide an answer we study monetary and fiscal policy games without commitment in a dynamic stochastic sticky price economy with monopolistic distortions. Monetary...
Persistent link: https://www.econbiz.de/10005410691
aftermath of the 2008 financial crisis. One of our most important innovations is to utilize the Divisia M4 index of money as the …
Persistent link: https://www.econbiz.de/10011171344
Persistent link: https://www.econbiz.de/10005515052
This paper establishes the existence of equilibria for environments in which outside money is issued competitively …. Such equilibria are typically believed not to exist because of a classic overissue problem: if money is valued in … equilibrium, an issuer produces money until its value is driven to zero. By backward induction, money cannot have value in the …
Persistent link: https://www.econbiz.de/10005515064
Term structure models and many descriptions of the transmission of monetary policy rest on the empirical relevance of the expectations hypothesis. Small differences in the perceived policy reaction function in VAR models of agent expectations strongly influence the relevance in the transmission...
Persistent link: https://www.econbiz.de/10005724241
Temzelides and Williamson present a model of private currency issuance to study the effect of clearing arrangements on the prices at which private currencies trade, on the volume of exchange, and on welfare. Their findings hinge on three factors: the location of the issuers relative to the area...
Persistent link: https://www.econbiz.de/10005724270