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Discretionary monetary policy in the Calvo model

Zandweghe, Willem Van; Wolman, Alexander - Federal Reserve Bank of Richmond - 2011

-period Taylor model, discretionary policy in the Calvo model does not accommodate predetermined prices in a way that inevitably …

Persistent link: https://www.econbiz.de/10009321093

The optimal rate of inflation with trending relative prices

Wolman, Alexander L. - Federal Reserve Bank of Richmond - 2009

The relative prices of different categories of consumption goods have been trending over time. Assuming they are … exogenous with respect to monetary policy, these trends imply that monetary policy cannot stabilize the prices of all … consumption categories. If prices are sticky, monetary policy then must trade off relative price distortions within different …

Persistent link: https://www.econbiz.de/10005009949

Optimal monetary policy

Khan, Aubhik; King, Robert G.; Wolman, Alexander L. - Federal Reserve Bank of Richmond - 2000

Optimal monetary policy maximizes welfare, given frictions in the economic environment. Constructing a model with two sets of frictions - the Keynesian friction of costly price adjustment by imperfectly competitive firms and the Monetarist friction of costly exchange of wealth for goods - we...

Persistent link: https://www.econbiz.de/10004993913

The case for price stability

Goodfriend, Marvin; King, Robert G. - Federal Reserve Bank of Richmond - 2001

Reasoning within the New Neoclassical Synthesis (NNS) we previously recommended that price stability should be the primary objective of monetary policy. We called this a neutral policy because it keeps output at its potential, defined as the outcome of an imperfectly competitive real business...

Persistent link: https://www.econbiz.de/10004993924

Selection and monetary non-neutrality in time-dependent pricing models

Carvalho, Carlos; Schwartzman, Felipe - Federal Reserve Bank of Richmond - 2012

disproportionately likely to be ones with prices set before the shock. This selection effect is important in a large class of sticky …

Persistent link: https://www.econbiz.de/10010598263

Inventories, inflation dynamics, and the New Keynesian Phillips curve

Lubik, Thomas A.; Teo, Wing Leong - Federal Reserve Bank of Richmond - 2010

We introduce inventories into an otherwise standard New Keynesian model and study the implications for inflation dynamics. Inventory holdings are motivated as a means to generate sales for demand-constrained firms. We derive various representations of the New Keynesian Phillips curve with...

Persistent link: https://www.econbiz.de/10008616945

Large excess reserves in the U.S.: a view from the cross-section of banks

Ennis, Huberto M.; Wolman, Alexander L. - Federal Reserve Bank of Richmond - 2012

Bank reserves in the United States increased dramatically at the end of 2008. Subsequent asset purchase programs in 2009 and 2011 more than doubled the quantity of reserves outstanding. These events required major adjustments in banks' balance sheets. We study the evolution of reserve holdings...

Persistent link: https://www.econbiz.de/10010593680

Deep habits in the New Keynesian Phillips curve

Lubik, Thomas A.; Teo, Wing Leong - Federal Reserve Bank of Richmond - 2011

We derive and estimate a New Keynesian Phillips curve (NKPC) in a model where consumers are assumed to have deep habits. Habits are deep in the sense that they apply to individual consumption goods instead of aggregate consumption. This alters the NKPC in a fundamental manner as it introduces...

Persistent link: https://www.econbiz.de/10010551314

Avoiding the inflation tax

Ennis, Huberto M. - Federal Reserve Bank of Richmond - 2005

Persistent link: https://www.econbiz.de/10005387444

Fiscal policy and regional inflation in a currency union

Duarte, Margarida; Wolman, Alexander L. - Federal Reserve Bank of Richmond - 2003

This paper investigates the ability of a region participating in a currency union to affect its inflation differential with respect to the union through fiscal policy. We study the interaction between regional fiscal policy and inflation differentials in a flexible-price, two-region model with...

Persistent link: https://www.econbiz.de/10004993883