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Parsing Financial Fragmentation in the Euro Area : A Multi-Country DSGE Perspective

Darracq Paries, Matthieu - 2016

The euro area experience during the financial crisis highlighted the importance of financial and sovereign risk factors in macroeconomic propagation, as well as the constraints that bank lending fragmentation would pose for monetary policy conduct in a currency union. We design a 6-region...

Persistent link: https://www.econbiz.de/10012993787

The Effect of Macroeconomic Uncertainty on Household Spending

Coibion, Olivier; Georgarakos, Dimitris; Gorodnichenko, … - 2021

Using a new survey of European households, we study how exogenous variation in the macroeconomic uncertainty perceived by households affects their spending decisions. We use randomized information treatments that provide different types of information about the first and/or second moments of...

Persistent link: https://www.econbiz.de/10013225751

Banks, Low Interest Rates, and Monetary Policy Transmission

Wang, Olivier - 2021

This paper studies how low interest rates weaken the short-run transmission of monetary policy and contract the long-run supply of bank credit. As U.S. bond rates have fallen, the pass-through of monetary shocks to loan and deposit rates has weakened while the spread on U.S. bank loans has...

Persistent link: https://www.econbiz.de/10013314913

The Reserve Fulfilment Path of Euro Area Commercial Banks : Empirical Testing Using Panel Data

Cassola, Nuno - 2021

The theory of liquidity management under uncertainty predicts that, under certain conditions, commercial banks will accumulate minimum reserve requirements linearly over the reserve maintenance period. This prediction is empirically tested using daily data (from March 2004 until February 2007)...

Persistent link: https://www.econbiz.de/10013316595

Optimal Monetary Policy in an Estimated DSGE for the Euro Area

Darracq Paries, Matthieu; Adjemian, Stephane; Moyen, … - 2021

wage inflation. Overall, the Ramsey policy together with its simple rule approximations seem to deliver consistent policy …

Persistent link: https://www.econbiz.de/10013316874

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

Shocks and Frictions in Us Business Cycles : A Bayesian DSGE Approach

Smets, Frank; Wouters, Rafael - 2021

explain the cross-correlation between output and inflation? What are the effects of productivity on hours worked? What are the …

Persistent link: https://www.econbiz.de/10013317250

The Elusive Welfare Economics of Price Stability as a Monetary Policy Objective : Why New Keynesian Central Bankers Should Validate Core Inflation

Buiter, Willem H. - 2021

The paper studies the inflation rate associated with optimal monetary and fiscal policy in a number of standard dynamic …, optimal inflation policy requires the validation, that is, the full accommodation of core producer inflation by actual … producer price inflation; (2) Optimal monetary policy implements Bailey-Friedman optimal quantity of money rule. No welfare …

Persistent link: https://www.econbiz.de/10013317652

Net Debt Supply Shocks in the Euro Area and the Implications for QE

Blattner, Tobias Sebastian - 2016

channel. The impact on the output gap and inflation in 2016 is of the order of 0.2ppt and 0.3ppt respectively. Our estimates … are likely to underestimate the overall impact of the ECB's purchases on interest rates and inflation, as they exclude …

Persistent link: https://www.econbiz.de/10012983078

Optimal Monetary Policy and the Transmission of Oil-Supply Shocks to the Euro Area under Rational Expectations

Adjemian, Stephane; Darracq Paries, Matthieu - 2009

mechanical influence on CPI inflation and wage dynamics through the indexation schemes. We also illustrate that any fine …-tuning strategy which tries to counteract the direct effects of oil-price changes in headline inflation would prove counterproductive … both in terms to stabilization of underlying inflation and by causing unnecessary volatility in the macroeconomic landscape …

Persistent link: https://www.econbiz.de/10014213432