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Optimal Monetary Policy When Agents are Learning
Molnar, Krisztina - 2013
intertemporal trade-off, not present under rational expectations: it is optimal to forego stabilizing the economy in the present in … actually has rational expectations is much smaller than if the central bank mistakenly assumes rational expectations when in …
Persistent link: https://www.econbiz.de/10013094668
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The Misspecification of Expectations in New Keynesian Models : A DSGE-VAR Approach
Cole, Stephen J. - 2016
macroeconomic variables and their corresponding expectations. In the empirical analysis, we exploit direct data on expectations from … surveys. To explain the joint evolution of realized variables and expectations, we adopt a DSGE-VAR approach, which allows us … failure of New Keynesian models under the rational expectations hypothesis to account for the dynamic interactions between …
Persistent link: https://www.econbiz.de/10012979607
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Monetary Policy with Diverse Private Expectations
Kurz, Mordecai - 2015
quadratic approximation. Aggregation renders the belief distribution an aggregate state variable. Diverse expectations change …
Persistent link: https://www.econbiz.de/10013024741
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Financial Frictions and Inflation Differentials in a Monetary Union
Hristov, Nikolay - 2010
This paper employs a stylized New Keynesian DSGE model for a monetary union to analyze whether cyclical inflation differentials can be explained by cross-country differences concerning the characteristics of financial markets. Our results suggest that empirically plausible degrees of...
Persistent link: https://www.econbiz.de/10013136243
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Uncertainty-Dependent Effects of Monetary Policy Shocks : A New Keynesian Interpretation
Castelnuovo, Efrem - 2018
We estimate a nonlinear VAR model to study the real effects of monetary policy shocks in regimes characterized by high vs. low macroeconomic uncertainty. We find unexpected monetary policy moves to exert a substantially milder impact in presence of high uncertainty. We then exploit the set of...
Persistent link: https://www.econbiz.de/10012926998
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Monetary Policy and the Relative Price of Durable Goods
Cantelmo, Alessandro - 2015
In a VAR model of the US, the response of the relative price of durables to a monetary contraction is either flat or mildly positive. It significantly falls only if narrowly defined as the ratio between new house and nondurables prices. These findings survive three identification strategies and...
Persistent link: https://www.econbiz.de/10013023113
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Q-Targeting in New Keynesian Models
Heer, Burkhard - 2016
We consider optimal monetary policy in a model that integrates credit frictions in the standard New Keynesian model with sticky prices and wages as well as adjustment costs of capital. Different from traditional models with credit frictions such as Carlstrom and Fuerst (1998), the model is able...
Persistent link: https://www.econbiz.de/10012993022
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Monetary Persistence and the Labor Market : A New Perspective
Lechthaler, Wolfgang; Merkl, Christian; Snower, Dennis J. - 2021
In this paper we propose a novel way to model the labor market in the context of a New-Keynesian general equilibrium model, incorporating labor market frictions in the form of hiring and firing costs. We show that such a model is able to replicate many important stylized facts of the business...
Persistent link: https://www.econbiz.de/10013316264
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Generalized Taylor and Generalized Calvo Price and Wage-Setting : Micro Evidence with Macro Implications
Dixon, Huw David - 2013
The Generalized Calvo and the Generalized Taylor model of price and wage-setting are, unlike the standard Calvo and Taylor counter-parts, exactly consistent with the distribution of durations observed in the data. Using price and wage micro-data from a major euro-area economy (France), we...
Persistent link: https://www.econbiz.de/10013094533
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Using Survey Data on Inflation Expectations in the Estimation of Learning and Rational Expectations Models
Ormeno, Arturo - 2011
Do survey data on inflation expectations contain useful information for estimating macroeconomic models? I address this … when solved under the assumptions of Rational Expectations and learning. This information serves as an additional moment … inflation expectations …
Persistent link: https://www.econbiz.de/10013120910