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A Role Model for China? Exchange Rate Flexibility and Monetary Policy in Japan

Schnabl, Gunther; Danne, Christian - 2021

Few papers have tried to project how Chinese monetary policy will behave under flexible exchange rates. As Japan … policy after the shift of Japan from a fixed to a floating exchange rate regime. The econometric estimations allow for regime … soften the appreciation pressure by interest rate cuts have led Japan into the liquidity trap …

Persistent link: https://www.econbiz.de/10013316946

Exchange Rate and Inflation Under Weak Monetary Policy : Turkey Verifies Theory

Gürkaynak, Refet S.; Kısacıkoğlu, Burçin; Lee, … - 2022

For the academic audience, this paper presents the outcome of a well-identified, large change in the monetary policy rule from the lens of a standard New Keynesian model and asks whether the model properly captures the effects. For policymakers, it presents a cautionary tale of the dismal...

Persistent link: https://www.econbiz.de/10014083478

Monetary Policy Surprises and Exchange Rate Behavior

Gürkaynak, Refet S. - 2020

Central banks unexpectedly tightening policy rates often observe the exchange value of their currency depreciate, rather than appreciate as predicted by standard models. We document this for Fed and ECB policy days using eventstudies and ask whether an information effect, where the public...

Persistent link: https://www.econbiz.de/10012822502

Forecasting Inflation with a Zero Lower Bound or Negative Interest Rates : Evidence from Point and Density Forecasts

Anderl, Christina; Caporale, Guglielmo Maria - 2022

bound (the US, the UK and Canada) and in those with negative rates (Japan, the Euro Area and Switzerland). Using shadow …

Persistent link: https://www.econbiz.de/10013292499

The role of political institutions for the effectiveness of central bank independence

Hielscher, Kai; Markwardt, Gunther - 2011

This paper empirically studies the impact of the quality of political institutions on the link between central bank independence and inflation. Making use of data on the evolution of central bank independence over time and controlling for possible nonlinearities, we employ interaction models to...

Persistent link: https://www.econbiz.de/10010274749

Japan's Low Inflation Conundrum

Mayer, Thomas; Schnabl, Gunther - 2022

The paper analyses the reasons for Japan’s persistently low inflation since the bursting of the Japanese bubble economy … (low inflation conundrum). It is shown that Japan experienced a structural break from a high-growth period with relatively … creation in Japan’s post-bubble period. With the price level being assumed to be dependent on both goods with free market …

Persistent link: https://www.econbiz.de/10014081262

A Note on Temporary Supply Shocks with Aggregate Demand Inertia

Caballero, Ricardo J.; Simsek, Alp - 2022

We study optimal monetary policy during temporary supply contractions when aggregate demand has inertia and expansionary policy is constrained. In this environment, it is optimal to run the economy hot until supply recovers. Positive output gaps in the low-supply phase lessen the negative output...

Persistent link: https://www.econbiz.de/10013282457

Determinants of Inflation Expectations

Moessner, Richhild - 2022

This paper analyses the determinants of short-term inflation expectations based on surveys of professionals, using dynamic cross-country panel estimation for a large number of 34 OECD economies. We find that food consumer price inflation and depreciations of the domestic exchange rate have...

Persistent link: https://www.econbiz.de/10013309489

How to Limit the Spillover from an Inflation Surge to Inflation Expectations?

Dräger, Lena; Lamla, Michael J.; Pfajfar, Damjan - 2023

We study the effects of forward-looking communication in an environment of rising inflation rates on German consumers’ inflation expectations using a randomized control trial. We show that information about rising inflation increases short- and long-term inflation expectations. This initial...

Persistent link: https://www.econbiz.de/10014358863

The Hidden Heterogeneity of Inflation and Interest Rate Expectations : The Role of Preferences

Dräger, Lena; Lamla, Michael J.; Pfajfar, Damjan - 2022

Using a new consumer survey dataset, we show that macroeconomic preferences affect expectations and economic decisions through different channels. While household expectations are on average inversely related to preferences, households with the same inflation or interest rate expectations can...

Persistent link: https://www.econbiz.de/10013293855