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Identifying Monetary Policy Shocks : A Natural Language Approach
Aruoba, S. Borağan; Drechsel, Thomas - National Bureau of Economic Research - 2024
constructed by only controlling for the staff forecasts imply responses of macro variables at odds with theory. We directly link …
Persistent link: https://www.econbiz.de/10014544696
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The Central Bank's Dilemma : Look Through Supply Shocks or Control Inflation Expectations?
Beaudry, Paul; Carter, Thomas J.; Lahiri, Amartya - National Bureau of Economic Research - 2023
When countries are hit by supply shocks, central banks often face the dilemma of either looking through such shocks or reacting to them to ensure that inflation expectations remain anchored. In this paper, we propose a tractable framework to capture this dilemma and explore optimal policy under...
Persistent link: https://www.econbiz.de/10014372498
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Credibility and Explicit Inflation Targeting
King, Robert G.; Lu, Yang - National Bureau of Economic Research - 2022
In his 2004 inflation targeting manifesto, Marvin Goodfriend described US monetary policy as implicit inflation targeting and advocated explicit targeting. Summarizing the 1965-2000 US inflation experience, he highlighted the importance of evolving Fed credibility, which accords with our recent...
Persistent link: https://www.econbiz.de/10013210040
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Household Inflation Expectations : An Overview of Recent Insights for Monetary Policy
D'Acunto, Francesco; Charalambakis, Evangelos; … - National Bureau of Economic Research - 2024
This paper discusses the recent wave of research that has emphasized the importance of measures of consumers' inflation expectations. In contrast to other measures of expected inflation, such as for experts or financial market participants, consumers' inflation expectations capture the broader...
Persistent link: https://www.econbiz.de/10014544766
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Evaluating Policy Counterfactuals : A VAR-Plus Approach
Caravello, Tomás E.; McKay, Alisdair; Wolf, Christian - National Bureau of Economic Research - 2024
In a rich family of linearized structural macroeconomic models, the counterfactual evolution of the macro-economy under alternative policy rules is pinned down by just two objects: first, reduced-form projections with respect to a large information set; and second, the dynamic causal effects of...
Persistent link: https://www.econbiz.de/10015072929
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Inflation Past, Present and Future : Fiscal Shocks, Fed Response, and Fiscal Limits
Cochrane, John H. - National Bureau of Economic Research - 2022
Our current inflation stemmed from a fiscal shock. The Fed is slow to react. Why? Will the Fed's slow reaction spur … high real interest rates. Price stickiness means inflation will persist past an initial shock. To reduce inflation, fiscal …
Persistent link: https://www.econbiz.de/10013210124
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Monetary Policy without Moving Interest Rates : The Fed Non-Yield Shock
Boehm, Christoph E.; Kroner, T. Niklas - National Bureau of Economic Research - 2024
-announcement times. We use a heteroskedasticity-based procedure to estimate a "Fed non-yield shock", which is orthogonal to yield changes … and is identified from excess volatility in the S&P 500 and various dollar exchange rates. A positive non-yield shock …-yield shock is essentially uncorrelated with previous monetary policy shocks and its effects are large in comparison. Its strong …
Persistent link: https://www.econbiz.de/10014576665
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Does Monetary Policy Matter? The Narrative Approach after 35 Years
Romer, Christina; Romer, David - National Bureau of Economic Research - 2023
inflation in the expected directions. Analysis of available policy records suggests that a contractionary monetary shock likely …
Persistent link: https://www.econbiz.de/10014250187
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How Do Supply Shocks to Inflation Generalize? Evidence from the Pandemic Era in Europe
Acharya, Viral V.; Crosignani, Matteo; Eisert, Tim; … - National Bureau of Economic Research - 2023
We document how supply-chain pressures, household inflation expectations, and firm pricing power interacted to induce the pandemic-era surge in consumer price inflation in the euro area. Initially, supply-chain pressures increased inflation through a cost-push channel and raised inflation...
Persistent link: https://www.econbiz.de/10014421216
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Navigating by Falling Stars : Monetary Policy with Fiscally Driven Natural Rates
Campos, Rodolfo G.; Fernández-Villaverde, Jesús; … - National Bureau of Economic Research - 2024
We study a new type of monetary-fiscal interaction in a heterogeneous-agent New Keynesian model with a fiscal block. Due to household heterogeneity, the stock of public debt affects the natural interest rate, forcing the central bank to adapt its monetary policy rule to the fiscal stance to...
Persistent link: https://www.econbiz.de/10014512073