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The Eurozone as an Inflation Target Zone
Posta, Pompeo Della; Tamborini, Roberto - 2022
In the revised monetary policy strategy of the European Central Bank (ECB), “price stability is best maintained by aiming for two per cent inflation over the medium term”, with “symmetric commitment” to this target. “Symmetry means that the Governing Council considers negative and...
Persistent link: https://www.econbiz.de/10014243104
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The Fiscal Theory of the Price Level with a Bubble
Brunnermeier, Markus K. - 2020
This paper incorporates a bubble term in the standard FTPL equation to explain why countries with persistently negative primary surpluses can have a positively valued currency and low inflation. It also provides an example with closed-form solutions in which idiosyncratic risk on capital returns...
Persistent link: https://www.econbiz.de/10012834354
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Designing the Policy Mix in a Monetary Union
Kempf, Hubert - 2020
This paper studies the design of the policy mix in a monetary union, that is, the institutional arrangement specifying the relationships between the various policymakers present in the union and the extent of their capacity of action. It is assumed that policymakers do not cooperate. Detailing...
Persistent link: https://www.econbiz.de/10012832189
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Redistribution and the Monetary-Fiscal Policy Mix
Bhattarai, Saroj; Lee, Jae Won; Yang, Choongryul - 2021
We show that the effectiveness of redistribution policy in stimulating the economy and improving welfare is directly tied to how much inflation it generates, which in turn hinges on monetary-fiscal adjustments that ultimately finance the transfers. We compare two distinct types of monetaryfiscal...
Persistent link: https://www.econbiz.de/10013314763
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Monetary Policy Interactions : The Policy Rate, Asset Purchases, and Optimal Policy with an Interest Rate Peg
Gödl-Hanisch, Isabel; Mau, Ronald; Rawls, Jonathan - 2023
We study monetary policy in a New Keynesian model with a variable credit spread and scope for central bank asset purchases to matter. A novel financial and labor market interaction generates an endogenous cost-push channel in the Phillips curve and a credit wedge in the IS curve. The “divine...
Persistent link: https://www.econbiz.de/10014357043
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Behavioral New Keynesian Models : Learning vs. Cognitive Discounting
Meggiorini, Greta; Milani, Fabio - 2021
This paper estimates a New Keynesian model with new and old behavioral elements. Agents in the model exhibit cognitive discounting, or myopia: they discount variables far into the future at higher rates than typically implied in the benchmark model. We investigate the model under different...
Persistent link: https://www.econbiz.de/10013229788
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Asymmetric capital-tax competition, unemployment and losses from capital market integration
Pethig, Rüdiger; Kolleß, Frieder - 2009
In a multi-country general equilibrium economy with mobile capital and rigid-wage unemployment, countries may differ in … conditions under which - in contrast to free trade with undistorted labor markets - welfare declines and unemployment increases …
Persistent link: https://www.econbiz.de/10010265967
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Unemployment in an interdependent world
Felbermayr, Gabriel J.; Larch, Mario; Lechthaler, Wolfgang - 2009
We introduce search and matching unemployment into a model of trade with differentiated goods and heterogeneous firms …
Persistent link: https://www.econbiz.de/10010266008
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Chinese Exchange Rate Policy : Lessons for Global Investors
Melvin, Michael - 2020
Chinese currency policy has had a strong impact on the value of investors' portfolios in recent years. On August 11, 2015, the People's Bank of China announced a new exchange rate policy where the RMB central parity rate against the USD would be determined each morning by the previous day's...
Persistent link: https://www.econbiz.de/10012825386
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Monetary Policy and Swedish Unemployment Fluctuations
Alexius, Annika; Holmlund, Bertil - 2021
such as unemployment. Previous studies indicate that monetary policy affects the output gap only at business cycle … frequencies, but the effects on unemployment may well be more persistent in countries with highly regulated labor markets. We … study the Swedish experience of unemployment and monetary policy. Using a structural VAR we find that around 30 percent of …
Persistent link: https://www.econbiz.de/10013316967