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Credit Spreads and Credit Policies
Correia, Isabel; De Fiore, Fiorella; Teles, Pedro; … - C.E.P.R. Discussion Papers - 2014
How should monetary and fiscal policy react to adverse financial shocks? If monetary policy is constrained by the zero lower bound on the nominal interest rate, subsidising the interest rate on loans is the optimal policy. The subsidies can mimic movements in the interest rate and can therefore...
Persistent link: https://www.econbiz.de/10011083684
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Unconventional Fiscal Policy at the Zero Bound
Correia, Isabel; Farhi, Emmanuel; Nicolini, Juan Pablo; … - C.E.P.R. Discussion Papers - 2011
When the zero lower bound on nominal interest rates binds, monetary policy cannot provide appropriate stimulus. We show that in the standard New Keynesian model, tax policy can deliver such stimulus at no cost and in a time-consistent manner. There is no need to use inefficient policies such as...
Persistent link: https://www.econbiz.de/10008854460
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Monetary Policy with Single Instrument Feedback Rules
Adão, Bernardino; Correia, Isabel; Teles, Pedro - C.E.P.R. Discussion Papers - 2005
We consider standard cash-in-advance monetary models and show that there are interest rate or money supply rules such that equilibria are unique. The existence of these single instrument rules depends on whether the economy has an infinite horizon or an arbitrarily large but finite horizon.
Persistent link: https://www.econbiz.de/10005661665
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Optimal Fiscal and Monetary Policy: Equivalence Results
Correia, Isabel; Nicolini, Juan Pablo; Teles, Pedro - C.E.P.R. Discussion Papers - 2003
In this Paper, we analyse the implications of price setting restrictions for the conduct of cyclical fiscal and monetary policy. We consider an environment with monopolistic competitive firms, a shopping time technology, prices set one period in advance, and government expenditures that must be...
Persistent link: https://www.econbiz.de/10005504488
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Monetary Policy Rules, Asset Prices and Exchange Rates
Chadha, Jagjit S; Sarno, Lucio; Valente, Giorgio - C.E.P.R. Discussion Papers - 2003
We examine empirically whether asset prices and exchange rates may be admitted into a standard interest rate rule, using data for the US, the UK and Japan since 1979. Asset prices and exchange rates can be employed as information variables for a standard `Taylor-type' rule or as arguments in an...
Persistent link: https://www.econbiz.de/10005667007
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Central Banks: Powerful, Political and Unaccountable?
Buiter, Willem H. - C.E.P.R. Discussion Papers - 2014
Central banks’ economic and political importance has grown in advanced economies since the start of the Great Financial … the only stabilization tool in town. However, much of the enhanced significance of central banks is due to their lender … and sovereigns. Supervisory and regulatory functions – often deeply political, have been heaped on central banks. Central …
Persistent link: https://www.econbiz.de/10011084413
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Credit, Financial Stability, and the Macroeconomy
Taylor, Alan M. - C.E.P.R. Discussion Papers - 2015
Since the 2008 global financial crisis, and after decades of relative neglect, the importance of the financial system and its episodic crises as drivers of macroeconomic outcomes has attracted fresh scrutiny from academics, policy makers, and practitioners. Theoretical advances are following a...
Persistent link: https://www.econbiz.de/10011213304
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Bank and Sovereign Risk Interdependence in the Euro Area
Kollintzas, Tryphon; Tsoukalas, Konstantinos - C.E.P.R. Discussion Papers - 2015
sovereign risk is also present. This result has three policy implications. First, Euro Area policies dealing with failing banks …
Persistent link: https://www.econbiz.de/10011201352
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Can Central Banks Go Broke?
Buiter, Willem H. - C.E.P.R. Discussion Papers - 2008
Central banks can go broke and have done so, although mainly in developing countries. The conventional balance sheet of … effective lender of last resort and market marker of last resort. As long as central banks don’t have significant foreign …
Persistent link: https://www.econbiz.de/10005656271
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Tax Reduction, Debt Stabilisation and Policy Rules: An Application to New Zealand
Osborne, C.; Wells, G. - Research School of Economics, College of Business and … - 1998
Recent reforms in New Zealand have focused attention on the achievement of well-specific objectives for monetary and fiscal policy. The Reserve Bank Act requires that monetary policy be directed towards maintenance of inflation in the 0-2 per cent range. The Fiscal Responsibility Act specifies a...
Persistent link: https://www.econbiz.de/10004971347