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Managing uncertainty through robust-satisficing monetary policy
Akram, Q. Farooq; Ben-Haim, Yakov; Eitrheim, Øyvind - Norges Bank - 2006
We employ information-gap decision theory to derive a robust monetary policy response to Knightian parameter uncertainty. This approach provides a quantitative answer to the question: For a specified policy, how much can our models and data err or vary, without rendering the outcome of that...
Persistent link: https://www.econbiz.de/10005481435
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House prices in Norway 1819-1989
Eitrheim, Øyvind; Erlandsen, Solveig K. - Norges Bank - 2004
Annual house price indices for four Norwegian cities are presented for the period from 1819 to 1989. The indices are constructed on the basis of nominal housing transaction prices compiled from the real property registers of the cities. Existing Norwegian house prices indices generally cover a...
Persistent link: https://www.econbiz.de/10005481433
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The historical connection between short term output and prices in a small open economy
Grytten, Ola; Hunnes, Arngrim - Norges Bank - 2009
According to a Keynesian view, short term output fluctuations are normally demand side led. Since prices reflect demand, they should mirror output fluctuations. Thus, prices and output are expected to move in the same direction in the short run. The present paper investigates the historical...
Persistent link: https://www.econbiz.de/10008514717
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What horizon for targeting inflation?
Q. Farooq Akram. - Norges Bank - 2008
We investigate optimal horizons for targeting inflation in response to different shocks and their properties under … alternative preferences of an inflation-targeting central bank. Our analysis is based on a well specified macroeconometric model … inflation and output. Successful inflation targeting in such cases may require a complex interest rate response. The optimal …
Persistent link: https://www.econbiz.de/10005292516
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The zero lower bound on the interest rate and a Neo-Classical Phillips curve
Alstadheim, Ragna - Norges Bank - 2010
With sticky prices, optimizing agents and money in the utility function, I derive the exact analytical solution for optimal monetary policy given a zero lower bound (ZLB) on the interest rate. The Phillips curve is Neo-Classical, and the ZLB is then not a constraint on optimal policy. Optimal...
Persistent link: https://www.econbiz.de/10008457309
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Price-level determinacy, lower bounds on the nominal interest rate, and liquidity traps
Alstadheim, Ragna; Henderson, Dale - Norges Bank - 2006
We consider standard monetary-policy rules with inflation-rate targets and interest-rate or money-growth instruments …-target equilibria (BTE) with inflation always below target and constant asymptotically approaching or eventually reaching a below … rate above a lower bound. We construct monetary-policy rules that preclude BTE, some which are monotonic in inflation but …
Persistent link: https://www.econbiz.de/10005063096
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Model selection for monetary policy analysis – Importance of empirical validity
Akram, Q. Farooq; Nymoen, Ragnar - Norges Bank - 2006
econometric models of wage and price inflation in Norway. We find that differences in model specification as well as in parameter …
Persistent link: https://www.econbiz.de/10005063098
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Firm-specific capital and welfare
Sveen, Tommy; Weinke, Lutz - Norges Bank - 2006
What are the consequences for monetary policy design implied by the fact that price setting and investment takes typically place simultaneously at the firm level? To address this question we analyze simple (constrained) optimal interest rate rules in the context of a dynamic New Keynesian model...
Persistent link: https://www.econbiz.de/10005649736
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The Origins of Foreign Exchange Policy: The National Bank of Belgium and the Quest for Monetary Independence in the 1850s
Ugolini, Stefano - Norges Bank - 2010
Can the central bank of a small open economy be mandated with the maintenance of both fixed exchange rates and monetary independence, and still succeed in the long term? Looking at a pioneering experiment put in place by the National Bank of Belgium, this article shows how foreign exchange...
Persistent link: https://www.econbiz.de/10008739739
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Explaining interest rate decisions when the MPC members believe in different stories
Claussen, Carl Andreas; Røisland, Øistein - Norges Bank - 2013
Modern central banks do not only announce the interest rate decision, they also communicate a "story" that explains why they reached the particular decision. When decisions are made by a committee, it could be difficult to find a story that is both consistent with the decision and representative...
Persistent link: https://www.econbiz.de/10010835402