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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 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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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
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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
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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
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Optimal disinflationary paths
Ireland, Peter N. - Federal Reserve Bank of Richmond - 1995
This paper characterizes optimal monetary policy in the context of a general equilibrium model with optimizing agents and staggered price setting. Starting from a steady state with positive inflation, a rapid disinflation is desirable when announcements of future monetary policy are fully...
Persistent link: https://www.econbiz.de/10004993939
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Wicksell's monetary framework and dynamic stability
Graboyes, Robert F.; Humphrey, Thomas M. - Federal Reserve Bank of Richmond - 1990
Traditionally, central banks seeking to stabilize general prices have followed policies similar to those advocated by … Knut Wicksell: when prices are higher that desired, raise interest rates to exert downward pressure on prices, and … conversely. Despite the historical predominance of interest rate-based monetary policies, analysts frequently focus on how prices …
Persistent link: https://www.econbiz.de/10004993989
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Overcoming the zero bound on interest rate policy
Goodfriend, Marvin - Federal Reserve Bank of Richmond - 2000
The paper proposes three options for overcoming the zero bound on interest rate policy: a carry tax on money, open market operations in long bonds, and monetary transfers. A variable carry tax on electronic bank reserves could enable a central bank to target negative nominal interest rates. A...
Persistent link: https://www.econbiz.de/10004994054