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Optimal Monetary Policy Rules with Labor Market Frictions
Faia, Ester - 2021
This paper studies optimal monetary policy rules in a framework with sticky prices, matching frictions and real wage rigidities. Optimal monetary policy is given by a constrained Ramsey plan in which the monetary authority maximizes the agents' welfare subject to the competitive economy...
Persistent link: https://www.econbiz.de/10013317347
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Negative Interest Rates, Excess Liquidity and Retail Deposits : Banks’ Reaction to Unconventional Monetary Policy in the Euro Area
Demiralp, Selva - 2019
' funding structures jointly with that in their excess liquidity holdings. We find evidence that banks highly exposed to the …, importantly, the explicit consideration of the role of excess liquidity in our analysis …
Persistent link: https://www.econbiz.de/10012869955
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Negative Interest Rates, Excess Liquidity and Retail Deposits : Banks’ Reaction to Unconventional Monetary Policy in the Euro Area
Demiralp, Selva; Eisenschmidt, Jens; Vlassopoulos, Thomas - 2021
reliance on retail deposit funding and the level of excess liquidity holdings may increase banks’ responsiveness to NIRP. We … segments. We are the first to document the importance of banks’ excess liquidity holdings for the effectiveness of NIRP …, pointing to a strong complementarity of NIRP with central bank liquidity injections, e.g. via asset purchases …
Persistent link: https://www.econbiz.de/10013221074
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The Implications of Liquidity Regulation for Monetary Policy Implementation and the Central Bank Balance Sheet Size : An Empirical Analysis of the Euro Area
Kedan, Danielle; Ventula Veghazy, Alexia - 2021
We analyse the impact of the Liquidity Coverage Ratio (LCR) on the demand for central bank reserves in the euro area … crisis and the associated introduction of new liquidity regulation …
Persistent link: https://www.econbiz.de/10013243820
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Monetary Policy with Judgment
Gelain, Paolo - 2020
Two approaches are considered to incorporate judgment in DSGE models. First, Bayesian estimation indirectly imposes judgment via priors on model parameters, which are then mapped into a judgmental interest rate decision. Standard priors are shown to be associated with highly unrealistic...
Persistent link: https://www.econbiz.de/10012834323
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Discretion Rather than Rules? When is Discretionary Policy-Making Better than the Timeless Perspective?
Sauer, Stephan - 2007
Discretionary monetary policy produces a dynamic loss in the New Keynesian model in the presence of cost-push shocks. The possibility to commit to a specific policy rule can increase welfare. A number of authors since Woodford (1999) have argued in favour of a timeless perspective rule as an...
Persistent link: https://www.econbiz.de/10012778005
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Optimal Simple Monetary Policy Rules and Non-Atomistic Wage Setters in a New-Keynesian Framework
Gnocchi, Stefano - 2006
The purpose of the paper is to design optimal monetary policy rules in a New-Keynesian model featuring the presence of non-atomistic unions. It is shown that concentrated labor markets call for more aggressive inflation stabilization. This is because the central bank is able to induce wage...
Persistent link: https://www.econbiz.de/10012779237
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Robust Monetary Rules under Unstructured and Structured Model Uncertainty
Levine, Paul - 2008
This paper compares two contrasting approaches to robust monetary policy design. The first developed by Hansen and Sargent (2003, 2007) assumes unstructured model uncertainty and uses a minimax robustness criterion to design monetary rules. This contrasts with an older literature that structures...
Persistent link: https://www.econbiz.de/10012772044
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Risk Management in Action - Robust Monetary Policy Rules under Structured Uncertainty
Levine, Paul; McAdam, Peter; Pearlman, Joseph; Pierse, … - 2021
Recent interest in 'Risk Management' has highlighted the relevance of Bayesian analysis for robust monetary-policy making. This paper sets out a comprehensive methodology for designing policy rules inspired by such considerations. We design rules that are robust with respect to model uncertainty...
Persistent link: https://www.econbiz.de/10013316594
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Policy Rate Decisions and Unbiased Parameter Estimation in Typical Monetary Policy Rules
Podpiera, Jirí - 2021
Policymakers do not always follow a simple rule for setting policy rates for various reasons and thus their choices are co-driven by a decision to follow a rule or not. Consequently, some observations are censored and cause bias in conventional estimators of typical Taylor rules. To account for...
Persistent link: https://www.econbiz.de/10013317042