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I develop a structural general equilibrium model and estimate it for New Zealand using Bayesian techniques. The estimated model considers a monetary policy regime where the central bank targets overall inflation but is also concerned about output, exchange rate movements, and interest rate...
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Mortgage loans are a striking example of a persistent nominal rigidity. As a result, under incomplete markets, monetary policy affects decisions through the cost of new mortgage borrowing and the value of payments on outstanding debt. Observed debt levels and payment to income ratios suggest the...
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"The Fed's ability to control the federal funds rate stems from its ability to alter the supply of liquidity in the … affect the federal funds rate--the liquidity effect. I find that operating procedure was used to guide daily open market … operations; however, there is little evidence of a liquidity effect at the daily frequency and even less evidence at lower …
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