Showing 1 - 10 of 12
We evaluate the Friedman-Schwartz hypothesis that a more accommodative monetary policy could have greatly reduced the severity of the Great Depression. To do this, we first estimate a dynamic, general equilibrium model using data from the 1920s and 1930s. Although the model includes eight...
Persistent link: https://www.econbiz.de/10012468438
Monetary DSGE models are widely used because they fit the data well and they can be used to address important monetary policy questions. We provide a selective review of these developments. Policy analysis with DSGE models requires using data to assign numerical values to model parameters. The...
Persistent link: https://www.econbiz.de/10012462581
What are the economic effects of an interest rate cut when an economy is in the midst of a financial crisis? Under what conditions will a cut stimulate output and employment, and raise welfare? Under what conditions will a cut have the opposite e ffects? We answer these questions in a general...
Persistent link: https://www.econbiz.de/10012469709
Why is it that inflation is persistently high in some periods and persistently low in other periods? We argue that lack of commitment in monetary policy may bear a large part of the blame. We show that, in a standard equilibrium model, absence of commitment leads to multiple equilibria, or...
Persistent link: https://www.econbiz.de/10012469802
duration three quarters, and variable capital utilization …
Persistent link: https://www.econbiz.de/10012470317
We analyze two monetary economies - a cash-credit good model and a limited participation model. In our models, monetary policy is made by a benevolent policymaker who cannot commit to future policies. We define and analyze Markov equilibrium in these economies. We show that there is no time...
Persistent link: https://www.econbiz.de/10012470590
We review the fiscal theory of the price level. We place special emphasis on the theory's implications for the …
Persistent link: https://www.econbiz.de/10012471099
This paper reviews recent research that grapples with the question: What happens after an exogenous shock to monetary policy? We argue that this question is interesting because it lies at the center of a particular approach to assessing the empirical plausibility of structural economic models...
Persistent link: https://www.econbiz.de/10012472408
We argue that discretionary monetary policy exposes the economy to welfare-decreasing instability. It does so by creating the potential for private expectations about the response of monetary policy to exogenous shocks to be self-fulfilling. Among the many equilibria that are possible, some have...
Persistent link: https://www.econbiz.de/10012473315
sales and nonfinancial corporate profits as well as increases in unemployment and manufacturing inventories, (iii) they …
Persistent link: https://www.econbiz.de/10012474229