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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

How Should Monetary Policy be Conducted in an Era of Price Stability?

Svensson, Lars E.O. - 2000

The paper discusses several issues related to how monetary policy should be conducted in an era of price stability. Low inflation (with base drift in the price level) and price-level stability (without such base drift) are compared, and a suitable loss function (corresponding to flexible...

Persistent link: https://www.econbiz.de/10012471258

Optimal Monetary Policy Inertia

Woodford, Michael - 1999

This paper considers the desirability of the observed tendency of central banks to adjust interest rates only gradually in response to changes in economic conditions. It shows, in the context of a simple model of optimizing private-sector behavior, that such inertial policy can be optimal. The...

Persistent link: https://www.econbiz.de/10012471529

The Equilibrium Degree of Transparency and Control in Monetary Policy

Faust, Jon - 1999

We examine a central bank's endogenous choice of degree of control and degree of transparency, under both commitment and discretion. Under commitment, we find that the deliberate choice of sloppy control is far less likely under a standard central-bank loss function than reported for a less...

Persistent link: https://www.econbiz.de/10012471635

Monetary Instruments and Policy Rules in a Rational Expectations Environment

Dotsey, Michael - 1983

This paper explores the implications of rational expectations and the aggregate supply theory advanced by Lucas (1973 …

Persistent link: https://www.econbiz.de/10012477988

Price Level Determinacy with an Interest Rate Policy Rule and Rational Expectations

McCallum, Bennett T. - 1980

This paper reconsiders a result obtained by Sargent and Wallace, namely, that price level indeterminacy obtains in their well-known model if the monetary authorities adopt a policy feedback rule for the interest rate rather than the money stock. Since the Federal Reserve seems often to have used...

Persistent link: https://www.econbiz.de/10012478574

Optimal Interest-Rate Rules in a Forward-Looking Model, and Inflation Stabilization versus Price-Level Stabilization

Giannoni, Marc P. - 2010

This paper characterizes the properties of various interest-rate rules in a basic forward-looking model. We compare simple Taylor rules and rules that respond to price-level fluctuations (called Wicksellian rules). We argue that by introducing an appropriate amount of history dependence in...

Persistent link: https://www.econbiz.de/10012462667

Simple and Robust Rules for Monetary Policy

Taylor, John B. - 2010

This paper focuses on simple rules for monetary policy which central banks have used in various ways to guide their interest rate decisions. Such rules, which can be evaluated using simulation and optimization techniques, were first derived from research on empirical monetary models with...

Persistent link: https://www.econbiz.de/10012462734

Sophisticated Monetary Policies

Atkeson, Andrew - 2009

In standard approaches to monetary policy, interest rate rules often lead to indeterminacy. Sophisticated policies, which depend on the history of private actions and can differ on and off the equilibrium path, can eliminate indeterminacy and uniquely implement any desired competitive...

Persistent link: https://www.econbiz.de/10012463764

A Monetary Policy Rule for Automatic Prevention of a Liquidity Trap

McCallum, Bennett T. - 2005

In analyses of "liquidity trap" problems associated with the zero lower bound (ZLB) on nominal interest rates, it is important to emphasize the difference between policy rule changes, intended to help escape an existing ZLB situation, and maintained policy rules designed so as to avoid ZLB...

Persistent link: https://www.econbiz.de/10012467631

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