Showing 1 - 10 of 55
Persistent link: https://www.econbiz.de/10005069415
We study how the use of judgement or add-factors in macroeconomic forecasting may disturb the set of equilibrium outcomes when agents learn using recursive methods. We isolate conditions under which "exuberance equilibria" exist in standard macroeconomic environments. These equilibria may...
Persistent link: https://www.econbiz.de/10005090911
Infinitely repeated games have been used to argue that reputation can substitute for commitment in monetary policymaking. A drawback of this approach is that it implies multiple equilibria. I argue that nominal asset prices can be used as an equilibrium selection mechanism. First, I introduce...
Persistent link: https://www.econbiz.de/10005069257
We consider the appropriate objective for monetary stabilization policy in a canonical “new Keynesian†model with staggered pricing of the kind proposed by Calvo (1983), but with a complete DSGE structure of the kind presented by Yun (1996) or Woodford (2003). It is shown that under...
Persistent link: https://www.econbiz.de/10005069501
Expected exchange rate changes are determined by interest rate differentials across countries and risk premia, while unexpected changes are driven by innovations to macroeconomic variables, which are amplified by time-varying market prices of risk. In a model where short rates respond to the...
Persistent link: https://www.econbiz.de/10005090764
This paper develops and estimates a macro-finance model that combines a canonical affine no-arbitrage finance specification of the term structure with standard macroeconomic aggregate relationships for output and inflation. From this new empirical formulation, we obtain several important...
Persistent link: https://www.econbiz.de/10005090922
Persistent link: https://www.econbiz.de/10005051379
Persistent link: https://www.econbiz.de/10004970332
Tradable permits are now widely used to control pollution. We investigate the implications of setting up such a system in another field -- population control --, either domestically or at the global level. We first generalize the framework with both tradable procreation allowances and tradable...
Persistent link: https://www.econbiz.de/10004977931
This paper studies the optimal trade-off between commitment and flexibility in an intertemporal consumption/savings choice model. Individuals expect to receive relevant information regarding their own situation and tastes - generating a value for flexibility - but also expect to suffer from...
Persistent link: https://www.econbiz.de/10005090888