Similar Search Results

Cieślak, Anna; Hansen, Stephen; McMahon, Michael; … - National Bureau of Economic Research - 2023

Uncertainty is a ubiquitous concern emphasized by policymakers. We study how uncertainty affects decision-making by the Federal Open Market Committee (FOMC). We distinguish between the notion of Fed-managed uncertainty vis-a-vis uncertainty that emanates from within the economy and which the Fed...

Persistent link: https://www.econbiz.de/10014436980

Uncertainty as Commitment

Nosal, Jaromir - 2013

Time-inconsistency of no-bailout policies can create incentives for banks to take excessive risks and generate endogenous crises when the government cannot commit. However, at the outbreak of financial problems, usually the government is uncertain about their nature, and hence it may delay...

Persistent link: https://www.econbiz.de/10012459895

Risk Sharing Externalities

Bocola, Luigi - 2020

aggregate risk. We propose a theory to explain these risk exposures. We study a financial accelerator model where entrepreneurs … inefficiently high risk exposure for entrepreneurs …

Persistent link: https://www.econbiz.de/10012481941

Monetary Policy in an Uncertain Environment

Feldstein, Martin - 2003

This paper discusses the nature of the uncertainty faced by central banks and considers three approaches to dealing with uncertainty(1) formal optimization models and robust rules based on such models; (2) informal rules like the Taylor rule and inflation targeting; and (3) a case by case...

Persistent link: https://www.econbiz.de/10012468728

Optimal Monetary Policy with Informational Frictions

Angeletos, George-Marios - 2011

This paper studies optimal policy in a business-cycle setting in which firms have a blurry understanding of the state of the economy due to informational or cognitive constraints. The latter are not only the source of nominal rigidity but also an impediment in the coordination of production. The...

Persistent link: https://www.econbiz.de/10012461077

Robust Optimal Policy in a Forward-Looking Model with Parameter and Shock Uncertainty

Giannoni, Marc - 2006

This paper characterizes a robust optimal policy rule in a simple forward-looking model, when the policymaker faces uncertainty about model parameters and shock processes. We show that the robust optimal policy rule is likely to involve a stronger response of the interest rate to fluctuations in...

Persistent link: https://www.econbiz.de/10012466729

Monetary Policy and the Currency Denomination of Debt : A Tale of Two Equilibria

Velasco, Andres - 2004

Exchange rate policies depend on portfolio choices, and portfolio choices depend on anticipated exchange rate policies. This opens the door to multiple equilibria in policy regimes. We construct a model in which agents optimally choose to denominate their assets and liabilities either in...

Persistent link: https://www.econbiz.de/10012467862

Contingent Reserves Management : An Applied Framework

Caballero, Ricardo J. - 2004

One of the most serious problems that a central bank in an emerging market economy can face, is the sudden reversal of capital inflows. Hoarding international reserves can be used to smooth the impact of such reversals, but these reserves are seldom sufficient and always expensive to hold. In...

Persistent link: https://www.econbiz.de/10012467904

Sovereign Debt Portfolios, Bond Risks, and the Credibility of Monetary Policy

Du, Wenxin - 2016

and nominal bond risks in the presence of risk-averse investors. In our model, low credibility governments inflate during … inflation, investors require risk premia on nominal debt, making nominal debt issuance costly for low credibility governments … significantly larger nominal bond risk premia and borrow less in local currency …

Persistent link: https://www.econbiz.de/10012456087

International Macro-Finance

Pavlova, Anna - 2010

International macro-finance is a new area of open economy macroeconomics that brings portfolio choice and asset pricing considerations into models of international macroeconomics. The importance of these considerations--typically relegated to Finance and largely overlooked in traditional...

Persistent link: https://www.econbiz.de/10012462027