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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

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

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

A Synthesis of Keynesian, Monetary, and Portfolio Approaches to FlexibleExchange Rates

Gylfason, Thorvaldur - 1982

This paper presents a simple synthesis of Keynesian, monetary, and portfolio approaches to macroeconomic theory under …

Persistent link: https://www.econbiz.de/10012478158

Portfolio Choice in a Monetary Open-Economy DSGE Model

Engel, Charles - 2006

this risk is hedged through nominal assets rather than through equities …

Persistent link: https://www.econbiz.de/10012466454

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

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

Robust Monetary Policy Under Model Uncertainty in a Small Model of the U.S. Economy

Onatski, Alexei - 2000

This paper examines monetary policy in Rudebusch and Svensson's (1999) two equation macroeconomic model when the policymaker recognizes that the model is an approximation and is uncertain about the quality of that approximation. It is argued that the minimax approach of robust control provides a...

Persistent link: https://www.econbiz.de/10012471286

Interest Rate Uncertainty as a Policy Tool

Ghironi, Fabio - 2020

discourages short-term inflows mainly through portfolio risk and precautionary saving channels. A markup channel generates net FDI … irreversibility of FDI, the currency of export invoicing, risk aversion of outside agents, and effective lower bound in the rest of …

Persistent link: https://www.econbiz.de/10012481668

Learning from Prices : Public Communication and Welfare

Amador, Manuel - 2008

We study the effect of releasing public information about productivity or monetary shocks when agents learn from nominal prices. While public releases have the benefit of providing new information, they can have the cost of reducing the informational efficiency of the price system. We show that,...

Persistent link: https://www.econbiz.de/10012464392

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