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Hyperbolic discounting and positive optimal inflation
Graham, Liam; Snower, Dennis J. - 2011
Keynesian model we show that, if households have hyperbolic discounting, small positive rates of inflation can be optimal. In … our baseline calibration, the optimal rate of inflation is 2.1% and remains positive across a wide range of calibrations …. -- optimal monetary policy ; inflation targeting ; unemployment ; Phillips curve ; nominal inertia ; monetary policy …
Persistent link: https://www.econbiz.de/10009130272
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Risk management-driven policy rate gap
Caggiano, Giovanni; Castelnuovo, Efrem; Nodari, Gabriela - 2018
uncertainty over and above that to expected inflation, output gap, and output growth. However, this evidence regards the Greenspan …
Persistent link: https://www.econbiz.de/10011884396
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Outside versus inside bonds : a Modigliani-Miller type result for liquidity constrained economies
Berentsen, Aleksander; Waller, Christopher - 2010
When agents are liquidity constrained, two options exist - sell assets or borrow. We compare the allocations arising in two economies: in one, agents can sell government (outside) bonds and in the other they can borrow by issuing (inside) bonds. All transactions are voluntary, implying no...
Persistent link: https://www.econbiz.de/10008797806
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Using Taylor rules to understand ECB monetary policy
Sauer, Stephan; Sturm, Jan-Egbert - 2003
is accommodating changes in inflation and hence follows a destabilising policy. However, this impression seems to be …
Persistent link: https://www.econbiz.de/10011404306
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How did U.S. consumers use their stimulus payments?
Coibion, Olivier; Gorodnichenko, Yuriy; Weber, Michael - 2020
Using a large-scale survey of U.S. consumers, we study how the large one-time transfers to individuals from the CARES Act affected their consumption, saving and labor-supply decisions. Most respondents report that they primarily saved or paid down debts with their transfers, with only about 15...
Persistent link: https://www.econbiz.de/10012263377
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Money creation and destruction
Faure, Salomon; Gersbach, Hans - 2017
We study money creation and destruction in today's monetary architecture within a general equilibrium setting. Two types of money are created and destructed: bank deposits, when banks grant loans to firms or to other banks, and central bank money, when the central bank grants loans to private...
Persistent link: https://www.econbiz.de/10011688423
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On the equivalence of private and public money
Brunnermeier, Markus Konrad; Niepelt, Dirk - 2019
When does a swap between private and public money leave the equilibrium allocation and price system unchanged? To answer this question, the paper sets up a generic model of money and liquidity which identifies sources of seignorage rents and liquidity bubbles. We derive sufficient conditions for...
Persistent link: https://www.econbiz.de/10012033128
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Drivers of large recessions and monetary policy responses
Melina, Giovanni; Villa, Stefania - 2023
Reserve, monetary policy shocks exerted a sizable positive contribution to output and inflation during the COVID-19 Crisis. …
Persistent link: https://www.econbiz.de/10014320690
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Optimal monetary policy with heterogeneous agents
Nuño, Galo; Thomas, Carlos - 2020
-term nominal bonds and costly inflation. Our model features two transmission channels of monetary policy: a Fisher channel, arising … from the impact of inflation on the initial price of long-term bonds, and a liquidity channel. The Fisher channel gives the … prices and thus relax borrowing limits. The result is optimal inflation front-loading. Numerically, we find that optimal …
Persistent link: https://www.econbiz.de/10012308600
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The macroeconomic loss function : a critical note
Mayer, Thomas - 2002
The standard loss function counts both positive and negative deviations from the output and inflation targets as losses …. But if the sample period is long enough, then output growth in excess of the target, and often also inflation rates that …
Persistent link: https://www.econbiz.de/10011541188