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Monetary Policy Rules and Oil Price Shocks
Pierdzioch, Christian; Kamps, Christophe - 2002
This paper studies the relative performance of alternative monetary policy rules in the presence of oil price shocks in a small open economy optimizing model. Our analysis shows that it is important to distinguish between alternative price indices (CPI, core CPI, and GDP deflator) when modeling...
Persistent link: https://www.econbiz.de/10010260484
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Strategic Complementarities and Optimal Monetary Policy
Levin, Andrew T.; López-Salido, José David; Yun, Tack - 2007
In this paper, we show that strategic complementarities'such as firm-specific factors or quasikinked demand?have crucial implications for the design of monetary policy and for the welfare costs of output and inflation variability. Recent research has mainly used log-linear approximations to...
Persistent link: https://www.econbiz.de/10010260590
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Asymmetric Expectation Effects of Regime Shifts and the Great Moderation
Liu, Zheng; Waggoner, Daniel F.; Zha, Tao - 2007
We assess the quantitative importance of expectation effects of regime shifts in monetary policy in a DSGE model that allows the monetary policy rule to switch between a ?bad? regime and a ?good? regime. When agents take into account such regime shifts in forming expectations, the expectation...
Persistent link: https://www.econbiz.de/10010260592
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On the non-optimality of information: an analysis of the welfare effects of anticipated shocks in the New Keynesian model
Wohltmann, Hans-Werner; Winkler, Roland C. - 2009
This paper compares the welfare effects of anticipated and unanticipated cost-push shocks within the canonical New Keynesian model with optimal monetary policy. We find that, for empirically plausible degrees of nominal rigidity, the anticipation of a future cost-push shock leads to a higher...
Persistent link: https://www.econbiz.de/10010277242
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The optimal inflation rate and firm-level productivity growth
Weber, Henning - 2012
Empirical data show that firms tend to improve their ranking in the productivity distribution over time. A stickyprice model with firm-level productivity growth fits this data and predicts that the optimal long-run inflation rate is positive and between 1.5% and 2% per year. In contrast, the...
Persistent link: https://www.econbiz.de/10010286841
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The evolution of inflation and unemployment: Explaining the roaring nineties
Karanassou, Marika; Sala, Héctor; Snower, Dennis J. - 2007
This paper argues that there is a nonzero inflation-unemployment tradeoff in the long-run due to frictional growth, a phenomenon that encapsulates the interplay of nominal staggering and money growth. The existence of a downward-sloping long-run Phillips curve suggests the development of a...
Persistent link: https://www.econbiz.de/10010276425
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The link of the monetary indicator to future inflation in the Euro Area - a simulation experiment
Stolz, Stéphanie; Gottschalk, Jan - 2001
We examine the indicator property of the monetary indicator for inflation. Using a P*-model, Svensson shows theoretically in a recent paper that the relationship between these two variables is rather tenuous. The present study employs empirical evidence on the relations in his model to quantify...
Persistent link: https://www.econbiz.de/10010332960
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Monetary policy during financial crises: Is the transmission mechanism impaired?
Jannsen, Nils; Potjagailo, Galina; Wolters, Maik H. - 2015
autoregressive (PVAR) model for 20 advanced economies. We interact all of the endogenous variables with financial crisis dummies … and inflation during the acute phase of a financial crisis. These effects are larger than those during non-crisis periods … not react at all and the response of output would be substantially lower. During the recovery phase of a financial crisis …
Persistent link: https://www.econbiz.de/10011314555
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Announcements of ECB unconventional programs: Implications for the sovereign risk of Italy
Falagiarda, Matteo; Reitz, Stefan - 2013
This paper studies the effects of ECB communications about unconventional monetary policy operations on the perceived sovereign risk of Italy over the last five years. More than fifty events concerning non-standard operations are identified and classified with respect to the specific ECB...
Persistent link: https://www.econbiz.de/10010319102
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Inflation persistence and the Philips curve revisited
Karanassou, Marika; Snower, Dennis J. - 2007
A major criticism against staggered nominal contracts is that they give rise to the so called "persistency puzzle" - although they generate price inertia, they cannot account for the stylised fact of inflation persistence. It is thus commonly asserted that, in the context of the new Phillips...
Persistent link: https://www.econbiz.de/10010273181