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Firms’ Risk Endogenous to Strategic Management Choices

Delis, Manthos D. - 2017

Use of variability of profits and other accounting-based ratios in order to estimate a firm's risk of insolvency is a well-established concept in management and economics. This paper argues that these measures fail to approximate the true level of risk accurately because managers consider other...

Persistent link: https://www.econbiz.de/10012970797

Controlling Inflation with Switching Monetary and Fiscal Policies : Expectations, Fiscal Guidance and Timid Regime Changes

Ascari, Guido - 2017

Inflation depends on both monetary and fiscal policies and on how agents believe that these policies will evolve in the future. Can monetary policy control inflation, when both monetary and fiscal policies are allowed to change over time? To analyse this problem, we study a model in which both...

Persistent link: https://www.econbiz.de/10012956987

A Shadow Rate Model with Time-Varying Lower Bound of Interest Rates

Kortela, Tomi - 2016

Typically a constant – or zero – lower bound for interest rates is applied in shadow rate term structure models. However, euro area yield curve data suggest that a time-varying lower bound might be appropriate for the euro area. I show that this indeed is the case, i.e. a shadow rate model...

Persistent link: https://www.econbiz.de/10012987963

Optimal Monetary Policy Under Bounded Rationality

Benchimol, Jonathan - 2018

Optimal monetary policy under discretion, commitment, and optimal simple rules regimes is analyzed through a behavioral New Keynesian model. Flexible price level targeting dominates under discretion; flexible inflation targeting dominates under commitment; and strict price level targeting...

Persistent link: https://www.econbiz.de/10012921091

Effects of Monetary Policy Decisions on Professional Forecasters’ Expectations and Expectations Uncertainty

Oinonen, Sami - 2018

In this paper, we examine how professional forecasters' expectations and expectation uncertainty have reacted to the ECB's interest rate decisions and non-conventional monetary policy measures during the period 1999-2017. The analysis makes use of a conventional dif-in-dif type set up with...

Persistent link: https://www.econbiz.de/10012907651

The Power of Forward Guidance and the Fiscal Theory of the Price Level

McClung, Nigel - 2018

Standard New Keynesian models predict implausibly large and favorable responses of inflation and output to expansionary forward guidance on interest rates. We find that the introduction of permanent or recurring active fiscal policy dampens the response of output and inflation to forward...

Persistent link: https://www.econbiz.de/10012908747

Private Information and Lender Discretion Across Time and Institutions

Ambrocio, Gene - 2018

time and lending institutions and show that part of this discretion is due to private information that lenders have on … private information content is higher. The results suggest that bank discretionary and private information acquisition …

Persistent link: https://www.econbiz.de/10012909619

Revisiting Intertemporal Elasticity of Substitution in a Sticky Price Model

Kilponen, Juha; Vilmunen, Jouko; Vähämaa, Oskari - 2021

Macroeconomic models typically assume additively separable preferences where consumption enters the utility function in a logarithmic form. This restriction implies that consumption growth is highly sensitive to movements in real interest rates, which in turn implies an unrealistically steep...

Persistent link: https://www.econbiz.de/10013224102

Endogenous TFP, Business Cycle Persistence and the Productivity Slowdown

Schmöller, Michaela; Spitzer, Martin - 2021

This paper analyses the procyclicality of euro area total factor productivity and its role in business cycle amplification by estimating a medium-scale DSGE model with endogenous productivity mechanism on euro area data. Total factor productivity evolves endogenously as a consequence of costly...

Persistent link: https://www.econbiz.de/10013228852

Precision of Public Information Disclosures, Banks’ Stability and Welfare

Takalo, Tuomas; Moreno, Diego - 2021

We study the optimal precision of public information disclosures about banks assets quality. In our model the precision … of information affects banks' cost of raising funding and asset profile riskiness. In an imperfectly competitive banking …-to-intermediate precision if banks contract their repayment promises on public information) maximizes stability, and also yields the maximum …

Persistent link: https://www.econbiz.de/10013243229