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Liquidity Traps : An Interest-Rate-Based Exit Strategy
Schmitt-Grohé, Stephanie - 2010
This paper analyzes a potential strategy for escaping liquidity traps. The strategy is based on an augmented Taylor-type interest-rate feedback rule and differs from usual specifications in that when inflation falls below a threshold, the central bank temporarily deviates from the traditional...
Persistent link: https://www.econbiz.de/10013136358
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In Search of the Transmission Mechanism of Fiscal Policy
Perotti, Roberto - 2012
private consumption and the real wage will fall, while some neo-keyenesian models predict the opposite. This paper discusses …
Persistent link: https://www.econbiz.de/10013105847
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Optimal Simple and Implementable Monetary and Fiscal Rules : Expanded Version
Schmitt-Grohé, Stephanie - 2006
sticky prices, a demand for money, taxation, and stochastic government consumption. We consider simple feedback rules whereby …
Persistent link: https://www.econbiz.de/10012779616
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Optimal Simple and Implementable Monetary and Fiscal Rules
Schmitt-Grohé, Stephanie; Uribe, Martín - 2021
with sticky prices, a demand for money, taxation, and stochastic government consumption. We consider simple policy rules …
Persistent link: https://www.econbiz.de/10013220424
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Managing Currency Pegs
Schmitt-Grohé, Stephanie; Uribe, Martín - 2021
The combination of a fixed exchange rate and downward nominal wage rigidity creates a real rigidity. In turn, this real rigidity makes the economy prone to involuntary unemployment during external crises. This paper presents a graphical analysis of alternative policy strategies aimed at...
Persistent link: https://www.econbiz.de/10013224397
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Optimal Fiscal and Monetary Policy Under Imperfect Competition
Schmitt-Grohé, Stephanie; Uribe, Martín - 2021
This paper studies optimal fiscal and monetary policy under imperfect competition in a stochastic, flexible-price, production economy without capital. It shows analytically that in this economy the nominal interest rate acts as an indirect tax on monopoly profits. Unless the social planner has...
Persistent link: https://www.econbiz.de/10013237034
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Optimal Fiscal and Monetary Policy in a Medium-Scale Macroeconomic Model : Expanded Version
Schmitt-Grohé, Stephanie; Uribe, Martín - 2021
In this paper, we study Ramsey-optimal fiscal and monetary policy in a medium-scale model of the U.S.\ business cycle. The model features a rich array of real and nominal rigidities that have been identified in the recent empirical literature as salient in explaining observed aggregate...
Persistent link: https://www.econbiz.de/10013240563
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Optimal Fiscal and Monetary Policy Under Sticky Prices
Schmitt-Grohé, Stephanie; Uribe, Martín - 2021
This paper studies optimal .scal and monetary policy under sticky product prices. The theoretical framework is a stochastic production economy without capital. The government finances an exogenous stream of purchases by levying distortionary income taxes, printing money, and issuing one-period...
Persistent link: https://www.econbiz.de/10013240611
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Fiscal Policy, Wealth Effects, and Markups
Monacelli, Tommaso - 2009
We document that variations in government purchases generate a rise in consumption, the real and the product wage, and … effect is linked to the degree of complementarity between consumption and hours. We show that the model is able to match our … the positive wealth effect on labor supply is small and therefore the negative wealth effect on consumption is, somewhat …
Persistent link: https://www.econbiz.de/10012765568
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Defense Government Spending is Contractionary, Civilian Government Spending is Expansionary
Perotti, Roberto - 2014
Impulse responses to government spending shocks in Standard Vector Autoregressions (SVARs) typically display "expansionary" features. However, SVARs can be subject to a "non-fundamentalness" problem. "Expectations - Augmented" VARs (EVARs), which use direct measures of forecasts of defense...
Persistent link: https://www.econbiz.de/10013053152