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Fiscal Multipliers at the Zero Lower Bound: The Role of Policy Inertia

Hills, Timothy S.; Nakata, Taisuke - Federal Reserve Board (Board of Governors of the … - 2014

The presence of the lagged shadow policy rate in the interest rate feedback rule reduces the government spending multiplier nontrivially when the policy rate is constrained at the zero lower bound (ZLB). In the economy with policy inertia, increased inflation and output due to higher government...

Persistent link: https://www.econbiz.de/10011115662

Reputation and Liquidity Traps

Nakata, Taisuke - Federal Reserve Board (Board of Governors of the … - 2014

Can the central bank credibly commit to keeping the nominal interest rate low for an extended period of time in the aftermath of a deep recession? By analyzing credible plans in a sticky-price economy with occasionally binding zero lower bound constraints, I find that the answer is yes if...

Persistent link: https://www.econbiz.de/10010886221

Overnight RRP Operations as a Monetary Policy Tool: Some Design Considerations

Frost, Joshua; Logan, Lorie; Martin, Antoine; McCabe, … - Federal Reserve Board (Board of Governors of the … - 2015

We review recent changes in monetary policy that have led to development and testing of an overnight reverse repurchase agreement (ON RRP) facility, an innovative tool for implementing monetary policy during the normalization process. Making ON RRPs available to a broad set of investors,...

Persistent link: https://www.econbiz.de/10011255343

Navigating Constraints: The Evolution of Federal Reserve Monetary Policy, 1935-59

Carlson, Mark A.; Wheelock, David C. - Federal Reserve Board (Board of Governors of the … - 2014

The 1950s are often pointed to as a decade in which the Federal Reserve operated a particularly successful monetary policy. The present paper examines the evolution of Federal Reserve monetary policy from the mid-1930s through the 1950s in an effort to understand better the apparent success of...

Persistent link: https://www.econbiz.de/10010787050

Identifying the Stance of Monetary Policy at the Zero Lower Bound: A Markov-switching Estimation Exploiting Monetary-Fiscal Policy Interdependence

Gonzalez-Astudillo, Manuel - Federal Reserve Board (Board of Governors of the … - 2014

In this paper, I propose an econometric technique to estimate a Markov-switching Taylor rule subject to the zero lower bound of interest rates. I show that incorporating a Tobit-like specification allows to obtain consistent estimators. More importantly, I show that linking the switching of the...

Persistent link: https://www.econbiz.de/10011095297

Conservatism and Liquidity Traps

Nakata, Taisuke; Schmidt, Sebastian - Federal Reserve Board (Board of Governors of the … - 2014

Appointing Rogoff's (1985) conservative central banker improves welfare if the economy is subject to large contractionary shocks and the policy rate occasionally falls to the zero lower bound (ZLB). In an economy with occasionally binding ZLB constraints, the anticipation of future ZLB episodes...

Persistent link: https://www.econbiz.de/10011115660

An agency problem in the MBS market and the solicited refinancing channel of large-scale asset purchases

Kandrac, John; Schlusche, Bernd - Federal Reserve Board (Board of Governors of the … - 2015

In this paper, we document that mortgage-backed securities (MBS) held by the Federal Reserve exhibit faster principal prepayment rates than MBS held by the rest of the market. Next, we show that this stylized fact persists even when controlling for factors that affect prepayment behavior, and...

Persistent link: https://www.econbiz.de/10011273692

Optimal monetary and fiscal policy: a linear-quadratic approach

Benigno, Pierpaolo; Woodford, Michael - Federal Reserve Board (Board of Governors of the … - 2004

We propose an integrated treatment of the problems of optimal monetary and fiscal policy, for an economy in which prices are sticky (so that the supply-side effects of tax changes are more complex than in standard fiscal analyses) and the only available sources of government revenue are...

Persistent link: https://www.econbiz.de/10005368129

Domestic and cross-border consequences of U.S. macroeconomic policies

Bryant, Ralph C.; Helliwell, John; Hooper, Peter - Federal Reserve Board (Board of Governors of the … - 1989

This paper reviews empirical evidence about the effects of changes in U.S. monetary policy and fiscal policy that has been accumulated during recent years in a series of collaborative research projects involving a variety of global macroeconometric models. The paper also considers, in...

Persistent link: https://www.econbiz.de/10005372596

An empirical analysis of policy coordination in the United States, Japan and Europe

Edison, Hali J.; Tryon, Ralph - Federal Reserve Board (Board of Governors of the … - 1986

Coordination of macroeconomic policy has been a major topic at recent summit meetings, and has been the subject of a … number of theoretical studies. However, relatively little empirical research exists on policy coordination. This paper is an … attempt to help fill this gap. The paper considers the quantitative importance of the coordination of fiscal and monetary …

Persistent link: https://www.econbiz.de/10005372624

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