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Exchange Rates, Local Currency Pricing and International Tax Policies

Chen, Sihao - 2018

Empirical evidence suggests that for many countries, retail prices of traded goods are sticky in national currencies. Movements in exchange rates then cause deviations from the law of one price, and exchange rate ëmisalignmentí, which cannot be corrected by monetary policy alone. This paper...

Persistent link: https://www.econbiz.de/10012480762

Does Policy Communication During Covid Work?

Coibion, Olivier - 2020

Using a large-scale survey of U.S. households during the Covid-19 pandemic, we study how new information about fiscal and monetary policy responses to the crisis affects households' expectations. We provide random subsets of participants in the Nielsen Homescan panel with different combinations...

Persistent link: https://www.econbiz.de/10012481579

Sharing the Burden : Monetary and Fiscal Responses to a World Liquidity Trap

Cook, David - 2011

With integrated trade and financial markets, a collapse in aggregate demand in a large country can cause 'natural real interest rates' to fall below zero in all countries, giving rise to a global 'liquidity trap'. This paper explores the policy choices that maximize the joint welfare of all...

Persistent link: https://www.econbiz.de/10012461527

Monetary Policy in the Open Economy Revisited : Price Setting and Exchange Rate Flexibility

Devereux, Michael B. - 2000

This paper develops a welfare-based model of monetary policy in an open economy. We focus on the extent to which monetary policy should be employed in maintaining the exchange rate. The traditional approach maintains that exchange rate flexibility is desirable in the presence of real...

Persistent link: https://www.econbiz.de/10012471102

Consumption Heterogeneity and Monetary Policy in an Open Economy

Chen, Sihao; Devereux, Michael B.; Shi, Kang; Xu, Jenny - National Bureau of Economic Research - 2022

We explore how consumption heterogeneity affects the international transmission mechanism of monetary shocks and the … presence of consumption heterogeneity and currency misalignment implies that CPI inflation targeting is no longer optimal in … currency misalignment and consumption heterogeneity can be eliminated, and even under LCP, PPI targeting is the optimal …

Persistent link: https://www.econbiz.de/10013172135

Monetary Policy Communications and their Effects on Household Inflation Expectations

Coibion, Olivier - 2019

We study how different forms of communication influence the inflation expectations of individuals in a randomized controlled trial. We first solicit individuals' inflation expectations in the Nielsen Homescan panel and then provide eight different forms of information regarding inflation....

Persistent link: https://www.econbiz.de/10012479438

Commodity Currencies and Monetary Policy

Devereux, Michael B. - 2018

Countries that specialize in commodity exports often exhibit a correlation between the relevant commodity price and the value of their currency. We explore a natural but little-studied explanation for this correlation. An increase in the commodity price leads to increases in the future values of...

Persistent link: https://www.econbiz.de/10012480727

Average Inflation Targeting and Household Expectations

Coibion, Olivier - 2020

Using a daily survey of U.S. households, we study how the Federal Reserve's announcement of its new strategy of average inflation targeting affected households' expectations. Starting with the day of the announcement, there is a very small uptick in the minority of households reporting that they...

Persistent link: https://www.econbiz.de/10012481139

Why Are Target Interest Rate Changes So Persistent?

Coibion, Olivier - 2011

While the degree of policy inertia in central banks' reaction functions is a central ingredient in theoretical and empirical monetary economics, the source of the observed policy inertia in the U.S. is controversial, with tests of competing hypotheses such as interest-smoothing and...

Persistent link: https://www.econbiz.de/10012461950

The Optimal Inflation Rate in New Keynesian Models

Coibion, Olivier - 2010

We study the effects of positive steady-state inflation in New Keynesian models subject to the zero bound on interest rates. We derive the utility-based welfare loss function taking into account the effects of positive steady-state inflation and show that steady-state inflation affects welfare...

Persistent link: https://www.econbiz.de/10012462562