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Forward guidance and the state of the economy

Keen, Benjamin D.; Richter, Alexander W.; Throckmorton, … - 2016 - This draft: May 19, 2016

guidance. Forward guidance via a news shock is less stimulative than an unanticipated monetary policy shock around the steady … state, but a news shock is more stimulative near the ZLB and always has a larger cumulative effect on output. When the …

Persistent link: https://www.econbiz.de/10011567922

Uncertainty Shocks in a Model of Effective Demand : Comment

Richter, Alexander W.; de Groot, Oliver; Throckmorton, … - 2018

Basu and Bundick (2017) show a second moment intertemporal preference shock creates meaningful declines in output in a … sticky price model with Epstein and Zin (1991) preferences. The result, however, rests on the way they model the shock. If a … preference shock is included in Epstein-Zin preferences, the distributional weights on current and future utility must sum to 1 …

Persistent link: https://www.econbiz.de/10014121010

Jointly Estimating Macroeconomic News and Surprise Shocks

Kilian, Lutz; Plante, Michael; Richter, Alexander W. - 2023

This paper clarifies the conditions under which the state-of-the-art approach to identifying TFP news shocks in Kurmann and Sims (2021, KS) identifies not only news shocks but also surprise shocks. We examine the ability of the KS procedure to recover responses to these shocks from data...

Persistent link: https://www.econbiz.de/10014357201

Macroeconomic Responses to Uncertainty Shocks : The Perils of Recursive Orderings

Kilian, Lutz; Plante, Michael; Richter, Alexander W. - 2022

A common practice in empirical macroeconomics is to examine alternative recursive orderings of the variables in structural vector autoregressive (VAR) models. When the implied impulse responses look similar, the estimates are considered trustworthy. When they do not, the estimates are used to...

Persistent link: https://www.econbiz.de/10014241670

How the New Fed Municipal Bond Facility Capped Muni-Treasury Yield Spreads in the Covid-19 Recession

Bordo, Michael D.; Duca, John V. - 2021

For over two centuries, the municipal bond market has been a source of systemic risk, which returned early in the COVID-19 downturn when borrowing from securities markets became costly for many private and public entities, and some found it difficult to borrow at all. Indeed, just before the Fed...

Persistent link: https://www.econbiz.de/10014048698

How New Fed Corporate Bond Programs Dampened the Financial Accelerator in the Covid-19 Recession

Bordo, Michael D.; Duca, John V. - 2020

In the financial crisis and recession induced by the COVID-19 pandemic, many investment-grade firms became unable to borrow from securities markets. In response, the Fed not only reopened its commercial paper funding facility but also announced it would purchase newly issued and seasoned bonds...

Persistent link: https://www.econbiz.de/10014048718