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New-Keynesian Macroeconomics and the Term Structure
Bekaert, Geert; Cho, Seonghoon; Moreno Ibáñez, Antonio - C.E.P.R. Discussion Papers - 2006
This article complements the structural New-Keynesian macro framework with a no-arbitrage affine term structure model. Whereas our methodology is general, we focus on an extended macro-model with unobservable processes for the inflation target and the natural rate of output which are filtered...
Persistent link: https://www.econbiz.de/10005136692
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Identifying Taylor rules in macro-finance models
Backus, David; Chernov, Mikhail; Zin, Stanley E. - C.E.P.R. Discussion Papers - 2013
illustrate the problem in several macro-finance models with Taylor rules. When the shock to the rule is observed by agents but … not economists, identification of the rule's parameters requires restrictions on the form of the shock. We show how such …
Persistent link: https://www.econbiz.de/10011083775
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The Simplest Test of Inflation Target Credibility
Svensson, Lars E O - C.E.P.R. Discussion Papers - 1994
A simple test of inflation target credibility is constructed by subtracting the maximum and minimum inflation rates consistent with the inflation targets from the yields to maturity on nominal bonds. This results in a target-consistent range of real yields on nominal bonds. If expected real...
Persistent link: https://www.econbiz.de/10005661572
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A Quantitative Exploration of the Opportunistic Approach to Disinflation
Aksoy, Yunus; Orphanides, Athanasios; Small, David; … - C.E.P.R. Discussion Papers - 2003
This Paper explores the quantitative implications of an approach to monetary policy that gained prominence in the United States during the 1990s. Proponents of this approach recommend that, when inflation is moderate but still above the long-run objective, the central bank should not move...
Persistent link: https://www.econbiz.de/10005123544
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Monetary Misconceptions: New and Old Paradigmata and Other Sad Tales
Buiter, Willem H. - C.E.P.R. Discussion Papers - 2000
Several recent studies imply that the response of national saving to fiscal policy is non-monotonic. In this paper, we use two data sets to search for the circumstances in which such non-monotonic responses arise: one refers to a sample of OECD countries, as in previous studies, and one to a...
Persistent link: https://www.econbiz.de/10005124252
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Five-Equation Macroeconomics: A Simple View of the Interactions Between Fiscal Policy and Monetary Policy
Kirsanova, Tatiana; Stehn, Sven Jari; Vines, David - C.E.P.R. Discussion Papers - 2006
This paper studies the interactions of fiscal and monetary policy when they stabilise a single economy against shocks in a dynamic setting. We assume that fiscal and monetary policies both stabilise the economy only by causing changes to aggregate demand. Our findings are as follows. If the both...
Persistent link: https://www.econbiz.de/10005656218
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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 Crisis in 2007. An unwillingness or inability of governments to use countercyclical fiscal policy has made monetary policy the only stabilization tool in town. However, much...
Persistent link: https://www.econbiz.de/10011084413
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Debt Stabilisation Bias and the Taylor Principle: Optimal Policy in a New Keynesian Model with Government Debt and Inflation Persistence
Stehn, Sven Jari; Vines, David - C.E.P.R. Discussion Papers - 2008
Leith and Wren-Lewis (2007) have shown that government debt is returned to its pre-shock level in a New Keynesian model …-debt economy, it may be optimal for discretionary monetary policy to cut the interest rate in response to a cost-push shock … optimal fiscal response to such a shock is more active under discretion than commitment, whatever the degree of inflation …
Persistent link: https://www.econbiz.de/10005666963
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Monetary Policies for Developing Countries: The Role of Institutional Quality
Huang, Haizhou; Wei, Shang-Jin - C.E.P.R. Discussion Papers - 2005
Weak public institutions, including high levels of corruption, characterize many developing countries. With a simple model, we demonstrate that institutional quality has important implications for the design of monetary policies and can produce several departures from the conventional wisdom. We...
Persistent link: https://www.econbiz.de/10005789083
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Optimal Policy with Low-Probability Extreme Events
Svensson, Lars E O - C.E.P.R. Discussion Papers - 2004
, which completely ignores the low-probability extreme event. The case when the size of the extreme shock is endogenous and …
Persistent link: https://www.econbiz.de/10005661622