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Transparency and Credibility : Monetary Policy with Unobservable Goals

Faust, Jon - 2010

We define and study transparency, credibility, and reputation in a model where the central bank's characteristics are unobservable to the private sector and are inferred from the policy outcome. A low-credibility bank optimally conducts a more inflationary policy than a high-credibility bank, in...

Persistent link: https://www.econbiz.de/10013137302

Asset Class Diversification and Delegation of Responsibilities between Central Banks and Sovereign Wealth Funds

Aizenman, Joshua - 2010

This paper presents a model comparing the degree of asset class diversification abroad by a central bank and a sovereign wealth fund. We show that if the central bank manages its foreign asset holdings in order to meet balance of payments needs, particularly in reducing the probability of sudden...

Persistent link: https://www.econbiz.de/10013137768

Debt and Conditionality Under Endogenous Terms of Trade Adjustment

Aizenman, Joshua - 2010

The purpose of this study is to identify conditions under which renewed international. lending will benefit both the developed and the developing countries. Our analysis will evaluate how the presence of terms of trade adjust-rent and distorted credit markets affect the conditions for the...

Persistent link: https://www.econbiz.de/10013139886

Inflation Forecast Targeting : Implementing and Monitoring Inflation Targets

Svensson, Lars E. O. - 2011

Inflation targeting is shown to imply inflation forecast targeting: the central bank's inflation forecast becomes an explicit intermediate target. Inflation forecast targeting simplifies both implementation and monitoring of monetary policy. The weight on output stabilization determines how...

Persistent link: https://www.econbiz.de/10013125561

Financial Crisis and the Paradox of Under- and Over-Regulation

Aizenman, Joshua - 2010

asymmetric information, as is the case when the public does not observe regulator's effort. Higher regulator effort, while … mitigates the above concerns, including information disclosure; increasing the independence of the regulatory agency from the … prudential regulations and information disclosure, enforced by the domestic regulator …

Persistent link: https://www.econbiz.de/10013152612

FDI and Trade -- Two Way Linkages?

Aizenman, Joshua; Noy, Ilan - 2021

The purpose of this paper is to investigate the intertemporal linkages between FDI and disaggregated measures of international trade. We outline a model exemplifying some of these linkages, describe several methods for investigating two-way feedbacks between various categories of trade, and...

Persistent link: https://www.econbiz.de/10013244915

Exchange Rate Regimes and Financial-Market Imperfections

Aizenman, Joshua; Hausmann, Ricardo - 2021

This paper investigates the design of an exchange rate policy for an economy where the domestic capital market is segmented from the global financial market, producers rely on credit to finance working capital needs, and the labor market is characterized by nominal contracts. We show that the...

Persistent link: https://www.econbiz.de/10013246054

Wage Contracts with Incomplete and Costly Information

Aizenman, Joshua - 2021

Optimal wage indexation, as derived by Gray, was subject to criticism due to a lack of efficient use of information … the insight of Cray's analysis. In so doing the analysis reveals the role of costs of information collection in a world … characterized by incomplete information.The analysis focuses also on the interaction between wage indexation and costly information …

Persistent link: https://www.econbiz.de/10013246094

Implementing Optimal Policy Through Inflation-Forecast Targeting

Svensson, Lars E. O.; Woodford, Michael - 2021

We examine to what extent variants of inflation-forecast targeting can avoid stabilization bias, incorporate history-dependence, and achieve determinancy of equilibrium, so as to reproduce a socially optimal equilibrium. We also evaluate these variants in terms of the transparency of the...

Persistent link: https://www.econbiz.de/10013246481

Endogenous Pricing to Market and Financing Costs

Aizenman, Joshua - 2021

This paper studies the endogenous determination of pricing to market, in a model with time dependent transportation costs, where the future terms of trade are random. Allowing time dependent transportation costs adds a dimension of investment to the pre-buying of imports, implying that financial...

Persistent link: https://www.econbiz.de/10013246985