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Monetary policy and stock market boom-bust cycles

Christiano, Lawrence J.; Ilut, Cosmin; Motto, Roberto - 2008

We explore the dynamic effects of news about a future technology improvement which turns out ex post to be overoptimistic. We find that it is difficult to generate a boom-bust cycle (a period in which stock prices, consumption, investment and employment all rise and then crash) in response to...

Persistent link: https://www.econbiz.de/10003803289

The Great Depression and the Friedman-Schwartz hypothesis

Christiano, Lawrence; Motto, Roberto; Rostagno, Massimo - 2004

We evaluate the Friedman-Schwartz hypothesis that a more accommodative monetary policy could have greatly reduced the severity of the Great Depression. To do this, we first estimate a dynamic, general equilibrium model using data from the 1920s and 1930s. Although the model includes eight...

Persistent link: https://www.econbiz.de/10009636549

Expectations and the stability problem for optimal monetary policies

Evans, George W.; Honkapohja, Seppo - 2000

Eine auf den Fundamentaldaten beruhende Regelbindung der Geldpolitik ohne Selbstverpflichtung, die bei vollkommen … geeigneter Weise in die optimale Geldpolitik einbezogen werden. Diese eindeutige Schlußfolgerung gilt auch dann, wenn sich der … wichtig es ist, die Geldpolitik angemessen zu gestalten und dabei nicht nur die Fundamentaldaten, sondern auch direkt die …

Persistent link: https://www.econbiz.de/10011418901

Near-rational exuberance

Bullard, James Brian (contributor); … - 2005

We study how the use of judgement or add-factorsʺ in macroeconomic forecasting may disturb the set of equilibrium outcomes when agents learn using recursive methods. We isolate conditions under which new phenomena, which we call exuberance equilibria, can exist in standard macroeconomic...

Persistent link: https://www.econbiz.de/10003209153

A toolkit for computing Constrained Optimal Policy Projections (COPPs)

De Groot, Oliver; Mazelis, Falk; Motto, Roberto; … - 2021

This paper presents a toolkit1 for generating optimal policy projections. It makes five contributions. First, the toolkit requires a minimal set of inputs: only a baseline projection for target and instrument variables and impulse responses of those variables to policy shocks. Second, it solves...

Persistent link: https://www.econbiz.de/10012519365

Asymmetric monetary policy rules for the euro area and the US

Maih, Junior; Mazelis, Falk; Motto, Roberto; … - 2021

We analyse the implications of asymmetric monetary policy rules by estimating Markovswitching DSGE models for the euro area (EA) and the US. The estimations show that until mid-2014 the ECB's response to in ation was more forceful when in ation was above 2% than below 2%. Since then, the ECB's...

Persistent link: https://www.econbiz.de/10012617047

Monetary policy strategies for the euro area : optimal rules in the presence of the ELB

Mazelis, Falk; Motto, Roberto; Ristiniemi, Annukka - 2023

We study alternative monetary policy strategies in the presence of the lower bound on nominal interest rates and a low equilibrium real rate using an estimated DSGE model for the euro area. We demonstrate that simple feedback rules that implement inflation targeting result in a binding lower...

Persistent link: https://www.econbiz.de/10014278603