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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 … fiscal theory to interpret historical episodes, including the rise and fall of inflation in the 1970s and 1980s, the long … pegs, the ends of hyperinflations, currency crashes, and the success of inflation targets. Going forward, fiscal theory …

Persistent link: https://www.econbiz.de/10013361983

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

Helicopter Drops and Liquidity Traps

Amador, Manuel; Bianchi, Javier - National Bureau of Economic Research - 2023

We show that if the central bank operates without commitment and faces constraints on its balance sheet, helicopter drops can be a useful stabilization tool during a liquidity trap. With commitment, even with balance sheet constraints, helicopter drops are irrelevant

Persistent link: https://www.econbiz.de/10014247967

Monetary Policy without Commitment

Afrouzi, Hassan; Halac, Marina; Rogoff, Kenneth S.; … - National Bureau of Economic Research - 2023

This paper studies the implications of central bank credibility for long-run inflation and inflation dynamics. We introduce central bank lack of commitment into a standard non-linear New Keynesian economy with sticky-price monopolistically competitive firms. Inflation is driven by the...

Persistent link: https://www.econbiz.de/10014287308

How Abundant Are Reserves? Evidence from the Wholesale Payment System

Afonso, Gara; Duffie, Darrell; Rigon, Lorenzo; Shin, … - National Bureau of Economic Research - 2022

Before the era of large central bank balance sheets, banks relied on incoming payments to fund outgoing payments in order to conserve scarce liquidity. Even in the era of large central bank balance sheets, rather than funding payments with abundant reserve balances, we show that outgoing...

Persistent link: https://www.econbiz.de/10013477228

Quantifying the Costs and Benefits of Quantitative Easing

Levin, Andrew T.; Lu, Brian L.; Nelson, William R. - National Bureau of Economic Research - 2022

We conduct a systematic analysis of the costs and benefits of large-scale securities purchases, using the Federal Reserve's QE4 program as a concrete example. This program was initiated at the onset of the pandemic in March 2020 and continued for two years, leading to a doubling of the Fed's...

Persistent link: https://www.econbiz.de/10013477241

Breaks in the Phillips Curve : Evidence from Panel Data

Smith, Simon C.; Timmermann, Allan; Wright, Jonathan H. - National Bureau of Economic Research - 2023

We revisit time-variation in the Phillips curve, applying new Bayesian panel methods with breakpoints to US and European Union disaggregate data. Our approach allows us to accurately estimate both the number and timing of breaks in the Phillips curve. It further allows us to determine the...

Persistent link: https://www.econbiz.de/10014250170

The Fiscal Consequences of Missing an Inflation Target

Andreolli, Michele; Rey, Hélène - National Bureau of Economic Research - 2023

The European Central Bank is unique in setting monetary policy for several sovereign states with heterogeneous debt levels and different maturity structures. The monetary-fiscal nexus is central to the functioning of the euro area. We focus on one particular aspect of that nexus, the effect the...

Persistent link: https://www.econbiz.de/10013537713

The Drivers of Post-Pandemic Inflation

Giannone, Domenico; Primiceri, Giorgio E. - National Bureau of Economic Research - 2024

Post-covid inflation was predominantly driven by unexpectedly strong demand forces, not only in the United States, but also in the Euro Area. In comparison, the inflationary impact of adverse supply shocks was less pronounced, even though these shocks significantly constrained economic activity....

Persistent link: https://www.econbiz.de/10015056186

Exchange Rate Pass-Through and the Welfare Effects of the Euro

Devereux, Michael B. - 1999

This paper explores the implications of the European single currency within a simple sticky price intertemporal model. The main issue we focus on is how the euro may alter the responsiveness of consumer prices to exchange rate changes. Our central conjectures is that the acceptance of the euro...

Persistent link: https://www.econbiz.de/10012471402

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