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The Bond Yield Conundrum : Alternative Hypotheses and the State of the Economy

Eijffinger, Sylvester; Mahieu, Ronald; Raes, Louis - Tilburg University, Center for Economic Research - 2010

We study the bond yield conundrum in a macro-finance framework. Building upon a exible and non-structural macro-finance model, we test the hypothesis that the bond yield conundrum is connected to various sources of uncertainty in the financial markets. Moreover we explicitly test for the role of...

Persistent link: https://www.econbiz.de/10011090282

Credit Market Distortions, Asset Prices and Monetary Policy

Pfajfar, Damjan; Santoro, E. - Tilburg University, Center for Economic Research - 2012

inflation from above, so that inflation tar- geting policies may not be capable of ensuring REE uniqueness. In such cases, it is … advisable to combine inflation responses with an appropriate reaction to the output gap and/or firm profitability. The negative … reaction of real activity and asset prices to inflationary shocks adds a negative force to inflation responses that counteracts …

Persistent link: https://www.econbiz.de/10011090294

Monetary Policy Rules, Adverse Selection and Long-Run Financial Risk

Eijffinger, Sylvester; Blommestein, H.J.; Qian, Z. - Tilburg University, Center for Economic Research - 2011

This paper constructs a macro-finance model with two types of borrowers: entrepreneurs who engage in productive activities and gamblers who play in lotteries. It links a central bank's interest rate policy to expected cash ows of both types of borrowers. Via this link we study how the...

Persistent link: https://www.econbiz.de/10011090362

Can the Fed talk the Hind Legs off the Stock Market? (replaces CentER DP 2011-072)

Eijffinger, Sylvester; Mahieu, Ronald; Raes, Louis - Tilburg University, Center for Economic Research - 2012

Abstract: Central banks in fluence financial markets' expectations of its future policy. By providing its stance on the prospects of the economy, rationalizing past decisions or announcing future actions, central banks affect financial markets' forecasts. In bad times monetary policy...

Persistent link: https://www.econbiz.de/10011090377

The Effect of Monetary Policy on Exchange Rates During Currency Crises : The Role of Debt, Institutions and Financial Openness

Eijffinger, Sylvester; Goderis, Benedikt - Tilburg University, Center for Economic Research - 2007

This paper examines the effect of monetary policy on the exchange rate during currency crises. Using data for a number of crisis episodes between 1986 and 2004, we find strong evidence that raising the interest rate: (i) has larger adverse balance sheet effects and is therefore less effective in...

Persistent link: https://www.econbiz.de/10011090390

The Economic Impact of Central Bank Transparency : A Survey

Eijffinger, Sylvester; van der Cruijsen, C.A.B. - Tilburg University, Center for Economic Research - 2007

We provide an up-to-date overview of the literature on the desirabil- ity of central bank transparency from an economic viewpoint. Since the move towards more transparency, a lot of research on its e¤ects has been carried out. First, we show how the theoretical literature has evolved, by...

Persistent link: https://www.econbiz.de/10011090505

Does monetary unification lead to excessive debt accumulation

Bovenberg, A.L.Bovenberg; Beetsma, R.M.W.J. - Tilburg University, Center for Economic Research - 1995

If discretionary monetary policy implies an inflation bias, monetary unification boosts the accumulation of public debt …

Persistent link: https://www.econbiz.de/10011090557

Reference-dependent Preferences and the Transmission of Monetary Policy

Pfajfar, Damjan; Gaffeo, E.; Petrella, I.; Santoro, E. - Tilburg University, Center for Economic Research - 2010

responses of output and inflation following a monetary innovation. The key predictions of the model are in line with the data …. We then explore the state-dependent trade-off between inflation and output stabilization that naturally arises in this … context. Greater elasticity of inflation to real activity during expansionary stages of the cycle promotes a stronger degree …

Persistent link: https://www.econbiz.de/10011090564

Did the FED Surprise the Markets in 2001? A Case Study for Vars with Sign Restrictions

Uhlig, H.F.H.V.S. - Tilburg University, Center for Economic Research - 2001

In 2001, the Fed has lowered interest rates in a series of cuts, starting from 6.5 % at the end of 2000 to 2.0 % by early November.This paper asks, whether the Federal Reserve Bank has been surprising the markets, taking as given the conventional view about the effect of monetary policy...

Persistent link: https://www.econbiz.de/10011090600

Currency Crisis, Monetary Policy and Corporate Balance Sheet Vulnerabilities

Eijffinger, Sylvester; Goderis, Benedikt - Tilburg University, Center for Economic Research - 2005

This paper studies how the exposure of a country's corporate sector to interest rate and exchange rate changes affects the probability of a currency crisis.To analyze this question, we present a model that defines currency crisis as situations in which the costs of maintaining a fixed exchange...

Persistent link: https://www.econbiz.de/10011090665