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Crump, Richard K. - 2020

We estimate the elasticity of intertemporal substitution (EIS)—the response of expected consumption growth to changes …). This unique data set allows us to estimate the consumption Euler equation with no auxiliary assumptions on the properties … with the results of much of the literature. In addition, planned consumption displays excess sensitivity to expected income …

Persistent link: https://www.econbiz.de/10012856136

Robust monetary policy with imperfect knowledge

Orphanides, Athanasios; Williams, John C. - Federal Reserve Board (Board of Governors of the … - 2007

We examine the performance and robustness properties of monetary policy rules in an estimated macroeconomic model in which the economy undergoes structural change and where private agents and the central bank possess imperfect knowledge about the true structure of the economy. Policymakers...

Persistent link: https://www.econbiz.de/10005512977

Simple rules for monetary policy

Williams, John C. - Federal Reserve Board (Board of Governors of the … - 1999

What is a good monetary policy rule for stabilizing the economy? In this paper, efficient policy rules are computed using the FRB/US large-scale open-economy macroeconometric model. Simple three-parameter policy rules are found to be very effective at minimizing fluctuations in inflation,...

Persistent link: https://www.econbiz.de/10005513062

Housing and the monetary transmission mechanism

Mishkin, Frederic S. - Federal Reserve Board (Board of Governors of the … - 2007

The housing market is of central concern to monetary policy makers. To achieve the dual goals of price stability and maximum sustainable employment, monetary policy makers must understand the role that housing plays in the monetary transmission mechanism if they are to set policy instruments...

Persistent link: https://www.econbiz.de/10005393624

Monetary policy with imperfect knowledge

Orphanides, Athanasios; Williams, John C. - Federal Reserve Board (Board of Governors of the … - 2005

We examine the performance and robustness of monetary policy rules when the central bank and the public have imperfect knowledge of the economy and continuously update their estimates of model parameters. We find that versions of the Taylor rule calibrated to perform well under rational...

Persistent link: https://www.econbiz.de/10005393746

Inflation scares and forecast-based monetary policy

Orphanides, Athanasios; Williams, John C. - Federal Reserve Board (Board of Governors of the … - 2003

Central banks pay close attention to inflation expectations. In standard models, however, inflation expectations are tied down by the assumption of rational expectations and should be of little independent interest to policy makers. In this paper, we relax the assumption of rational expectations...

Persistent link: https://www.econbiz.de/10005393747

Three lessons for monetary policy in a low inflation era

Reifschneider, David; Williams, John C. - Federal Reserve Board (Board of Governors of the … - 1999

The zero lower bound on nominal interest rates constrains the central bank's ability to stimulate the economy during downturns. We use the FRB/US model to quantify the effects of the bound on macroeconomic stabilization and to explore how policy can be designed to minimize these effects. During...

Persistent link: https://www.econbiz.de/10005393770

Robustness of simple monetary policy rules under model uncertainty

Levin, Andrew; Wieland, Volker; Williams, John C. - Federal Reserve Board (Board of Governors of the … - 1998

In this paper, we investigate the properties of alternative monetary policy rules using four structural macroeconometric models: the Fuhrer-Moore model, Taylor's Multi-Country Model, the MSR model of Orphanides and Wieland, and the FRB staff model. All four models incorporate the assumptions of...

Persistent link: https://www.econbiz.de/10005393821

Welfare-maximizing monetary policy under parameter uncertainty

Edge, Rochelle M.; Laubach, Thomas; Williams, John C. - Federal Reserve Board (Board of Governors of the … - 2007

This paper examines welfare-maximizing monetary policy in an estimated micro-founded general equilibrium model of the U.S. economy where the policymaker faces uncertainty about model parameters. Uncertainty about parameters describing preferences and technology implies not only uncertainty about...

Persistent link: https://www.econbiz.de/10005393827

The performance of forecast-based monetary policy rules under model uncertainty

Levin, Andrew; Wieland, Volker; Williams, John C. - Federal Reserve Board (Board of Governors of the … - 2001

We investigate the performance of forecast-based monetary policy rules using five macroeconomic models that reflect a wide range of views on aggregate dynamics. We identify the key characteristics of rules that are robust to model uncertainty: such rules respond to the one-year ahead inflation...

Persistent link: https://www.econbiz.de/10005394090