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In this paper, we analyze which currencies can be regarded as safe haven currencies. Our empirical approach allows us to distinguish between a low- and high stress regime, and to control for the impact of carry trade reversals and other fundamental determinants. We therefore address the question...
Persistent link: https://www.econbiz.de/10010433356
The "Great Lockdown" implemented in response to the COVID-19 pandemic has led to a severe world-wide economic crisis …
Persistent link: https://www.econbiz.de/10012250617
Survey data on inflation expectations show that: (i) private sector forecasts and central bank forecasts are not fully aligned and (ii) private sector forecasters disagree about inflation expectations. To reconcile these two facts we introduce dispersed information in a New Keynesian model,...
Persistent link: https://www.econbiz.de/10011520661
Persistent link: https://www.econbiz.de/10002912972
At the zero lower bound (ZLB), expectations about the future path of monetary or fiscal policy are crucial. We model expectations formation under level-k thinking, a form of bounded rationality introduced by García-Schmidt and Woodford (2019) and Farhi and Werning (2017), consistent with...
Persistent link: https://www.econbiz.de/10012101259
.S. data shows significantly different responses in inflation and inflation expectations consistent with theory. …
Persistent link: https://www.econbiz.de/10011740252
According to the two-country full information New Keynesian model with flexible exchange rates, the real exchange rate appreciates in response to an asymmetric negative demand shock at the zero lower bound (ZLB) and exacerbates the adverse macroeconomic effects. This finding requires inflation...
Persistent link: https://www.econbiz.de/10012510174