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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
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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
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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
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The pitfalls of monetary discretion
Khan, Aubhik; King, Robert G.; Wolman, Alexander L. - Federal Reserve Bank of Richmond - 2001
multiplicity is a form of policy complementarity. Specifically, prices set in the current period embed expectations about future … policy, and actual future policy responds to these same prices. For a range of values of the fundamental state variable — a … ratio of predetermined prices — there is complementarity between actual and expected policy, and multiple equilibria occur …
Persistent link: https://www.econbiz.de/10004993940
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Financial stability, deflation, and monetary policy
Goodfriend, Marvin - Federal Reserve Bank of Richmond - 2001
preliminary conclusions. Equity prices are a misleading guide for interest rate policy. Monetary policy tactics protect market …
Persistent link: https://www.econbiz.de/10004993948
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Structure from shocks
Dotsey, Michael - Federal Reserve Bank of Richmond - 1999
Arguments in favor of Keynesian models as opposed to real business cycle models are often made on the grounds that the correlations and impulse response patterns found in the latter are inconsistent with the data. A recent and prominent example of this reasoning is Gali (1999). But certain...
Persistent link: https://www.econbiz.de/10004994012
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Does state-dependent pricing imply coordination failure?
Wolman, Alexander L. - Federal Reserve Bank of Richmond - 1999
The analysis in Ball and Romer [1991] suggests that models with fixed costs of changing price may be rife with multiple equilibria; in their static model price adjustment is always characterized by strategic complementarity, a necessary condition for multiplicity. We extend Ball and Romer's...
Persistent link: https://www.econbiz.de/10004994063
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Sticky prices and inventories : production smoothing reconsidered
Hornstein, Andreas; Sarte, Pierre-Daniel - Federal Reserve Bank of Richmond - 2001
Persistent link: https://www.econbiz.de/10005717283
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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
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Staggered prices and inventories: production smoothing reconsidered
Hornstein, Andreas; Sarte, Pierre-Daniel - Federal Reserve Bank of Richmond - 1998
Persistent link: https://www.econbiz.de/10005387443