Narrow search
Showing 1 - 10 of 209
Cover Image
CPI Inflation Targeting and Exchange Rate Pass-through
Flamini, Alessandro - EconWPA - 2003
This paper analyzes how imperfect exchange rate pass-through affects the transmission of the CPI inflation targeting optimal monetary policy. In the short run, delayed pass-through constraints monetary policy more than incomplete pass-through and interest rate smoothing amplifies this effect. In...
Persistent link: https://www.econbiz.de/10005126184
Cover Image
Monetary Policy with a Wider Information Set: a Bayesian Model Averaging Approach
Milani, Fabio - EconWPA - 2004
Monetary policy has been usually analyzed in the context of small macroeconomic models where central banks are allowed to exploit a limited amount of information. Under these frameworks, researchers typically derive the optimality of aggressive monetary rules, contrasting with the observed...
Persistent link: https://www.econbiz.de/10005412848
Cover Image
The Fed and the Stock Market
D'Agostino, Antonello; Sala, Luca; Surico, Paolo - EconWPA - 2005
The Fed closely monitors the stock market and the stock market continuously forms expectations about the Fed decisions. What does this imply for the relation between the fed funds rate and the S&P500? We find that the answer depends on the conditions prevailing on the financial market. During...
Persistent link: https://www.econbiz.de/10005076811
Cover Image
Liquidity Trap Prevention and Escape: A Simple Proposition
Cai, Junning - EconWPA - 2004
Liquidity traps occur when the natural nominal interest rate becomes negative. In a model with capital price dynamics … explicitly considered, we find that shocks in the future can cause current and lasting liquidity traps. We propose that the … central bank can prevent or fix liquidity traps by appending to its inflation-targeting monetary policy with a prioritized …
Persistent link: https://www.econbiz.de/10005561118
Cover Image
Multiple Critiques of Woodford’s Model of a Cashless Economy
Eagle, David - EconWPA - 2005
Woodford’s (2003) model of a cashless economy is the basis for his book Interest and Prices. Since Woodford assumes complete markets, this paper explicitly includes state-contingent securities with either temporary money or a cash-in-advance constraint to analyze Woodford’s logic. This...
Persistent link: https://www.econbiz.de/10005561359
Cover Image
Optimal Monetary Policy under Heterogeneous Expectations
Gomes, Orlando - EconWPA - 2004
Monetary policy has an important role in the determination of the inflation rate and the output gap time trajectories. Monetary authorities should choose the nominal interest rate time path that best serves the goals of price stability (primarily) and output growth (as a consequence of the...
Persistent link: https://www.econbiz.de/10005126273
Cover Image
Should we be afraid of Friedman's rule?
Uhlig, Harald - EconWPA - 2000
Should one think of zero nominal interest rates as an undesirable liquidity trap or as the desirable Friedman rule? I …-sitting coop'' model implies multiple equilibria, but does not support the injection of liquidity to restore the good equilibrium …
Persistent link: https://www.econbiz.de/10005561156
Cover Image
Dedollarizing the Peruvian Economy
Moron, Eduardo; Castro, Juan F. - EconWPA - 2003
Financial dollarization creates design problems for economic policy as increases the level of financial vulnerability. However, countries with high levels of dollarization have done almost nothing to reduce it. In this paper we study two ways to do it and we evaluate them within a model that...
Persistent link: https://www.econbiz.de/10005412579
Cover Image
Financial Dollarization and the Size of the Fear
Castro, Juan F.; Morón, Eduardo - EconWPA - 2005
Based on the significance of a Minimum Variance Portfolio (MVP) for the understanding of dollarization equilibria, a significant strand of the debate concerned with the driving forces behind this phenomenon has focused on analyzing the determinants of the relative volatility of inflation...
Persistent link: https://www.econbiz.de/10005412746
Cover Image
Should Monetary Policy Respond to Asset Price Misalignments?
Kontonikas, Alexandros; Ioannidis, Christos - EconWPA - 2004
This paper analyses the relationship between monetary policy and asset prices using a structural rational expectations model that allows for the effect of asset prices on aggregate demand. We assume that asset prices follow a partial adjustment mechanism whereas they are positively affected by...
Persistent link: https://www.econbiz.de/10005076790