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Optimal Inflation Targets, `Conservative' Central Banks, and Linear Inflation Contracts

Svensson, Lars E. O. - 2021

Inflation target regimes (like those of New Zealand, Canada, U.K., Sweden and Finland) are interpreted as having explicit inflation targets and implicit output/unemployment targets. Without output-unemployment persistence delegation of monetary policy to a discretionary instrument-independent...

Persistent link: https://www.econbiz.de/10013229046

Models for the Analysis of Labor Force Dynamics

Flinn, Christopher J.; Heckman, James J. - 2021

This paper presents new econometric methods for the empirical analysis of individual labor market histories. The techniques developed here extend previous work on continuous time models in four ways: (1) A structural economic interpretation of these models is presented. (2) Time varying...

Persistent link: https://www.econbiz.de/10013229389

Closing Small Open Economy Models

Schmitt-Grohé, Stephanie; Uribe, Martín - 2021

The small open economy model with incomplete asset markets features a steady state that depends on initial conditions and equilibrium dynamics that possess a random walk component. A number of modifications to the standard model have been proposed to induce stationarity. This paper presents a...

Persistent link: https://www.econbiz.de/10013230366

Characterizing Selection Bias Using Experimental Data

Heckman, James J.; Ichimura, Hidehiko; Smith, Jeffrey A.; … - 2021

justify three widely-used classes of estimators and our extensions of them: (a) the method of matching; (b) the classical … data from a nonexperimental comparison group, we reject the assumptions justifying matching and our extensions of that … with experimentally-estimated program impa matching participants to comparison group members in the same labor market, givi …

Persistent link: https://www.econbiz.de/10013232004

General Equilibrium Cost Benefit Analysis of Education and Tax Policies

Heckman, James J.; Lochner, Lance; Taber, Christopher - 2021

This paper formulates and estimates an open-economy overlapping generation general-equilibrium model of endogenous heterogeneous human capital in the form of schooling and on-the-job training. Physical capital accumulation is also analyzed. We use the model to explain rising wage inequality in...

Persistent link: https://www.econbiz.de/10013232148

Time Consistency of Fiscal and Monetary Policy : A Solution

Persson, Mats; Persson, Torsten; Svensson, Lars E. O. - 2021

This paper demonstrates how time consistency of the Ramsey policy - the optimal fiscal and monetary policy under commitment - can be achieved. Each government should leave its successor with a unique maturity structure for the nominal and indexed debt, such that the marginal benefit of a...

Persistent link: https://www.econbiz.de/10013232768

Inflation Targeting : Some Extensions

Svensson, Lars E. O. - 2021

Previous analysis of the implementation of inflation targeting is extended to monetary policy responses to different shocks, consequences of model uncertainty, effects of interest rate smoothing and stabilization, a comparison with nominal GDP targeting, and implications of forward-looking...

Persistent link: https://www.econbiz.de/10013232903

Debt, Cash Flow and Inflation Incentives : A Swedish Example

Persson, Mats; Persson, Torsten; Svensson, Lars E. O. - 2021

The fiscal gains from, and hence the political incentives to, an increase in inflation rate of ten percentage points may be substantial: with Swedish data from 1994, these gains would have been an annual real flow of 3-4 percent of GDP, or a capitalized value of nearly 100 percent of GDP. They...

Persistent link: https://www.econbiz.de/10013233859

The Term Structure of Interest Rate Differentials in a Target Zone : Theory and Swedish Data

Svensson, Lars E. O. - 2021

The term structure of interest rate differentials is derived in a model of a small open economy with a target zone exchange rate regime. The target zone is modeled as a regulated Brownian motion. The interest rate differentials are computed as the solution to a parabolic partial differential...

Persistent link: https://www.econbiz.de/10013238715

Instrumental Variables, Selection Models, and Tight Bounds on the Average Treatment Effect

Heckman, James J.; Vytlacil, Edward - 2021

This paper exposits and relates two distinct approaches to bounding the average treatment effect. One approach, based on instrumental variables, is due to Manski (1990, 1994), who derives tight bounds on the average treatment effect under a mean independence form of the instrumental variables...

Persistent link: https://www.econbiz.de/10013239385