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We provide new evidence on the response of real interest rates and inflation to monetary shocks. Our measure of monetary policy shocks is based on unexpected changes in interest rates over a 30-minute window surrounding scheduled Federal Reserve announcements. Our estimates indicate that nominal...
Persistent link: https://www.econbiz.de/10010969387
England changed its rate very frequently. Why did the policies of these central banks, the two pillars of the gold standard …
Persistent link: https://www.econbiz.de/10010950888
Motivated by the recent experience of the U.S. and the Eurozone, we describe the quantitative properties of a New Keynesian model with a zero lower bound (ZLB) on nominal interest rates, explicitly accounting for the nonlinearities that the bound brings. Besides showing how such a model can be...
Persistent link: https://www.econbiz.de/10011271396
important internal media of exchange. This system arose piecemeal. In the absence of banks and treasuries that exchanged paper …
Persistent link: https://www.econbiz.de/10011254927
We characterize the optimal sequential choice of monetary policy in economies with either nominal or indexed debt. In a model where nominal debt is the only source of time inconsistency, the Markov-perfect equilibrium policy implies the progressive depletion of the outstanding stock of debt,...
Persistent link: https://www.econbiz.de/10005085112
This paper explores several issues concerning a possible zero lower bound (ZLB) including its theoretical rationale; the magnitude of effects of low sustained inflation on real interest rates; the validity of analyzing monetary policy in models with no monetary variables; and the dynamic...
Persistent link: https://www.econbiz.de/10005085164
Most central banks perceive a trade-off between stabilizing inflation and stabilizing the gap between output and … Keynesian model is extended to allow for real wage rigidities, the divine coincidence disappears, and central banks indeed face …
Persistent link: https://www.econbiz.de/10005085258
, and who could incorporate banks. How the debate at the 1787 Constitutional Convention over these powers evolved and led …
Persistent link: https://www.econbiz.de/10005087446
whose accumulated value, as measured by the Target balances in the national central banks' balance sheets, was 404 billion … euros in August 2011. The national central banks of these countries covered the deficits by creating and lending out …
Persistent link: https://www.econbiz.de/10009372441
The relatively infrequent nature of major credit distress events makes an historical approach particularly useful. Using a combination of historical narrative and econometric techniques, we identify major periods of credit distress from 1875 to 2007, examine the extent to which credit distress...
Persistent link: https://www.econbiz.de/10008601682