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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

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