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(Un)Conventional Monetary and Fiscal Policy
Wu, Jing Cynthia; Xie, Yinxi - National Bureau of Economic Research - 2022
We build a tractable New Keynesian model to jointly study four types of monetary and fiscal policy. We find quantitative easing (QE), lump-sum fiscal transfers, and government spending have the same effects on the aggregate economy when fiscal policy is fully tax financed. Compared with these...
Persistent link: https://www.econbiz.de/10013477198
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Fiscal Histories
Cochrane, John H. - National Bureau of Economic Research - 2022
The fiscal theory states that inflation adjusts so that the real value of government debt equals the present value of real primary surpluses. Monetary policy remains important. The central bank can set an interest rate target, which determines the path of expected inflation, while news about the...
Persistent link: https://www.econbiz.de/10013361983
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Fiscal Consequences of Central Bank Losses
Cecchetti, Stephen G.; Hilscher, Jens - National Bureau of Economic Research - 2024
In response to the Global Financial Crisis, central banks engaged in large-scale asset purchases funded by the issuance of reserves. These "unconventional" policies continued during the pandemic, so that by 2022 central banks' balance sheets had grown up to ten-fold. As a result of rapidly...
Persistent link: https://www.econbiz.de/10014544756
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Fiscal and Monetary Policy with Heterogeneous Agents
Auclert, Adrien; Rognlie, Matthew; Straub, Ludwig - National Bureau of Economic Research - 2024
In the past decade, a new paradigm for fiscal and monetary policy analysis has emerged, combining the canonical macro model of income and wealth inequality with the New Keynesian model. These Heterogeneous-Agent New Keynesian ("HANK") models feature new transmission channels and allow for the...
Persistent link: https://www.econbiz.de/10015072932
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Optimal Monetary and Fiscal Policies in Disaggregated Economies
Cox, Lydia; Feng, Jiacheng; Müller, Gernot J.; Pasten, … - National Bureau of Economic Research - 2024
The jointly optimal monetary and fiscal policy mix in a multi-sector New Keynesian model with sectoral government spending and productivity shocks entails a separation of roles: Sectoral government spending optimally adjusts to sectoral output gaps and inflation rates---a policy supported by...
Persistent link: https://www.econbiz.de/10015072856
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Optimal Monetary Policy with Redistribution
La'O, Jennifer; Morrison, Wendy A. - National Bureau of Economic Research - 2024
We study optimal monetary policy in a general equilibrium economy with heterogeneous agents and nominal rigidities. Households differ in type-specific, state-contingent labor productivity and initial firm ownership, yet markets are complete. The fiscal authority has access to a linear tax...
Persistent link: https://www.econbiz.de/10015072863
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Inspecting the Mechanism of Quantitative Easing in the Euro Area
Koijen, Ralph S. J. - 2019
Using new data on security-level portfolio holdings by investor type and across countries in the euro area, we study portfolio rebalancing during the European Central Bank's (ECB) purchase programme that started in March 2015. To quantify changes in risk concentration, we estimate the evolution...
Persistent link: https://www.econbiz.de/10012480098
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ECB Policies Involving Government Bond Purchases : Impact and Channels
Krishnamurthy, Arvind - 2017
We evaluate the effects of three ECB policies (the Securities Markets Programme, the Outright Monetary Transactions, and the Long-Term Refinancing Operations) on government bond yields. We use a novel Kalman-filter augmented event-study approach and yields on euro-denominated sovereign bonds,...
Persistent link: https://www.econbiz.de/10012453728
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Fiscal Policy and Monetary Integration in Europe
Gali, Jordi - 2003
A popular view among economists, policymakers, and the media, is that the Maastricht Treaty and then Stability and Growth Pact have significantly impaired the ability of EU governments to conduct a stabilizing fiscal policy and to provide an adequate level of public infrastructure. In this...
Persistent link: https://www.econbiz.de/10012468923
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Over-optimistic Official Forecasts in the Eurozone and Fiscal Rules
Frankel, Jeffrey A. - 2012
. The members of the eurozone are supposedly constrained by the fiscal caps of the Stability and Growth Pact. Yet ever since …•Despite the well-known tendency of eurozone members to exceed the 3% cap on budget deficits, often in consecutive … among eurozone forecasts. If euro area governments are not in violation of the 3% cap at the time forecasts are made …
Persistent link: https://www.econbiz.de/10012460377