In this paper, we assess the effects of changes to the primarycredit facility since August 2007 by performing out-of-samplesimulations based on a model developed by Artuç andDemiralp (2008). Our results are highly consistent with thepredictions of our 2008 study—that is, the revised...

We describe a behavior of a central bank when its measures of current inflation and outputare subject to measurement errors, in a framework of optimizing models with nominal pricestickiness. In our model, a central bank sets the interest rate equal to its current estimate of theso-called...

Several authors have documented a reduced variability ofoutput and inflation in the United States since the beginningof the 1980s.1 In fact, a comparison of the 1980:1-2001:2 periodwith the two preceding decades shows that the standarddeviation of quarterly output growth has fallen 30...

While systemic risk—the risk of wholesale failure of banksand other financial institutions—is generally consideredto be the primary reason for supervision and regulation of thebanking industry, almost all regulatory rules treat such risk inisolation. In particular, they do not account for...

[...]Importantly, these studies rely entirely on ex post analysis.In other words, the studies ask, Given the actual inflationoutcome, did the costs of TIPS issuances exceed the costs ofnominal Treasury issuances of similar durations? Thisapproach depends on the actual inflation outcome, which...