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Financial globalization and monetary policy discipline

Spiegel, Mark M. - Federal Reserve Bank of San Francisco - 2008

The literature appears to have reached a consensus that financial globalization has had a "disciplining effect" on monetary policy, as it has reduced the returns from--and hence the temptation for--using monetary policy to stabilize output. As a result, monetary policy over recent years has...

Persistent link: https://www.econbiz.de/10005361467

Inflation targeting under imperfect knowledge

Orphanides, Athanasios; Williams, John C. - Federal Reserve Bank of San Francisco - 2006

context of an economy where economic agents have an imperfect understanding of the macroeconomic landscape within which the ….S. economy, we show that monetary policy rules that would perform well under the assumption of rational expectations can perform …

Persistent link: https://www.econbiz.de/10005361476

Does inflation targeting anchor long-run inflation expectations? evidence from long-term bond yields in the U.S., U.K., and Sweden

Gürkaynak, Refet S.; Levin, Andrew T.; Swanson, Eric T. - Federal Reserve Bank of San Francisco - 2006

We investigate the extent to which inflation targeting helps anchor long-run inflation expectations by comparing the behavior of daily bond yield data in the United Kingdom and Sweden--both inflation targeters--to that in the United States, a non-inflation-targeter. Using the difference between...

Persistent link: https://www.econbiz.de/10005361530

A macro-finance model of the term structure, monetary policy, and the economy

Rudebusch, Glenn D.; Wu, Tao - Federal Reserve Bank of San Francisco - 2003

This paper develops and estimates a macro-finance model that combines a canonical affine no-arbitrage finance specification of the term structure with standard macroeconomic aggregate relationships for output and inflation. From this new empirical formulation, we obtain several important...

Persistent link: https://www.econbiz.de/10010702130

Inflation scares and forecast-based monetary policy

Orphanides, Athanasios; Williams, John C. - Federal Reserve Bank of San Francisco - 2003

expectations in the economy and in the conduct of monetary policy. Agents are assumed to have imperfect knowledge of the precise … structure of the economy and the policymakers' preferences. Expectations are governed by a perpetual learning technology. With …

Persistent link: https://www.econbiz.de/10010702134

Imperfect knowledge, inflation expectations, and monetary policy

Orphanides, Athanasios; Williams, John C. - Federal Reserve Bank of San Francisco - 2002

This paper investigates the role that imperfect knowledge about the structure of the economy plays in the formation of … learning technology to form expectations and continuously update their beliefs regarding the dynamic structure of the economy …

Persistent link: https://www.econbiz.de/10010702135

How important is precommitment for monetary policy?

Dennis, Richard; Soderstrom, Ulf - Federal Reserve Bank of San Francisco - 2002

Economic outcomes in dynamic economies with forward-looking agents depend crucially on whether or not the central bank can precommit, even in the absence of the traditional "inflation bias." This paper quantifies the welfare differential between precommitment and discretionary policy in both a...

Persistent link: https://www.econbiz.de/10010702151

Assessing nominal income rules for monetary policy with model and data uncertainty

Rudebusch, Glenn D. - Federal Reserve Bank of San Francisco - 2000

Nominal income rules for monetary policy have long been debated, but two issues are of particular recent interest. First, there are questions about the performance of such rules over a range of plausible empirical models-especially models with and without rational inflation expectations. Second,...

Persistent link: https://www.econbiz.de/10010702167

Robust monetary policy with competing reference models

Levin, Andrew T.; Williams, John C. - Federal Reserve Bank of San Francisco - 2003

reference model while the true economy lies within a specified neighborhood of the reference model. In this paper, we show that … economy. We find that a robust outcome is attainable only in cases where the objective function places substantial weight on … tolerance of each model economy with respect to deviations from optimal policy. …

Persistent link: https://www.econbiz.de/10010702172

Inferring policy objectives from economic outcomes

Dennis, Richard - Federal Reserve Bank of San Francisco - 2003

economy's evolution over time. The paper derives conditions under which the parameters in a policymaker's policy objective …-price model of the US economy, estimating jointly all of the model's behavioral parameters and the policy regime parameters. The …

Persistent link: https://www.econbiz.de/10010702194