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Macroeconomic Shocks and the Business Cycle: Evidence from a Structural Factor Model

Forni, Mario; Gambetti, Luca - C.E.P.R. Discussion Papers - 2010

-shock specification, we identify, using sign restrictions, two non-policy shocks, demand and supply, and two policy shocks, monetary and … fiscal. We obtain the following results. (ii) Both supply and demand shocks are important sources of fluctuations; supply … prevails for GDP, while demand prevails for employment and inflation. (ii) Policy matters: Both monetary and fiscal policy …

Persistent link: https://www.econbiz.de/10008468698

Monetary transmission in low income countries

Mishra, Prachi; Montiel, Peter J; Spilimbergo, Antonio - C.E.P.R. Discussion Papers - 2010

This paper reviews the monetary transmission mechanism in low income countries (LICs). We use monetary transmission in advanced and emerging markets as a benchmark to identify aspects of the transmission mechanism that may operate differently in LICs. In particular, we focus on the effects of...

Persistent link: https://www.econbiz.de/10008466328

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

Comparing Inflation and Price Level Targeting: the Role of Forward Guidance and Transparency

Honkapohja, Seppo; Mitra, Kaushik - C.E.P.R. Discussion Papers - 2015

We examine global dynamics under learning in New Keynesian models with price level targeting that is subject to the zero lower bound. The role of forward guidance is analyzed under transparency about the policy rule. Properties of transparent and non-transparent regimes are compared to each...

Persistent link: https://www.econbiz.de/10011213315

Optimal Monetary and Fiscal Policy in an Economy with Endogenous Public Debt

Luk, Paul; Vines, David - C.E.P.R. Discussion Papers - 2015

This paper uses a New Keynesian framework to study the coordination of fiscal and monetary policies, in response to an inflation shock when the policymaker acts with commitment. We first show that, in the simplest New Keynesian model, fiscal policy plays no part in the optimal policy response,...

Persistent link: https://www.econbiz.de/10011276383

Optimal Monetary and Fiscal Policy in an Economy with Inflation Persistence

Luk, Paul; Vines, David - C.E.P.R. Discussion Papers - 2015

This paper studies a simple New-Keynesian model of fiscal and monetary policy coordination when the policymaker acts under commitment. With a New Keynesian Phillips curve it is optimal to control inflation only through the use of monetary policy. But, when price-setters use a Steinsson (2003)...

Persistent link: https://www.econbiz.de/10011276384

Bubbles and Central Banks: Historical Perspectives

Brunnermeier, Markus K; Schnabel, Isabel - C.E.P.R. Discussion Papers - 2015

This paper reviews some of the most prominent asset price bubbles from the past 400 years and documents how central banks (or other institutions) reacted to those bubbles. The historical evidence suggests that the emergence of bubbles is often preceded or accompanied by an expansionary monetary...

Persistent link: https://www.econbiz.de/10011249380

Oil Price Shocks, Monetary Policy and Stagflation

Kilian, Lutz - C.E.P.R. Discussion Papers - 2009

One of the central questions in recent macroeconomic history is to what extent monetary policy as opposed to oil price shocks contributed to the stagflation of the 1970s. Understanding what went wrong in the 1970s is the key to learning from the past. One explanation explored in Barsky and...

Persistent link: https://www.econbiz.de/10005016247

A Gains from Trade Perspective on Macroeconomic Fluctuations

Beaudry, Paul; Portier, Franck - C.E.P.R. Discussion Papers - 2011

Business cycles reflect changes over time in the amount of trade between individuals. In this paper we show that incorporating explicitly intra-temporal gains from trade between individuals into a macroeconomic model can provide new insight into the potential mechanisms driving economic...

Persistent link: https://www.econbiz.de/10009221567

Fiscal Volatility Shocks and Economic Activity

Fernández-Villaverde, Jesús; Guerron-Quintana, Pablo A.; … - C.E.P.R. Discussion Papers - 2011

We study the effects of changes in uncertainty about future fiscal policy on aggregate economic activity. Fiscal deficits and public debt have risen sharply in the wake of the financial crisis. While these developments make fiscal consolidation inevitable, there is considerable uncertainty about...

Persistent link: https://www.econbiz.de/10009246602

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