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Optimal interest rate rules and inflation stabilization versus price-level stabilization
Giannoni, Marc Paolo - 2012
This paper compares the properties of interest rate rules such as simple Taylor rules and rules that respond to price-level fluctuations - called Wicksellian rules - in a basic forward-looking model. By introducing appropriate history dependence in policy, Wicksellian rules perform better than...
Persistent link: https://www.econbiz.de/10009522769
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The Optimal Inflation Target and the Natural Rate of Interest
Andrade, Philippe - 2018
We study how changes in the value of the steady-state real interest rate affect the optimal inflation target, both in …-for-one: increases in the optimal inflation rate are generally lower than declines in the steady-state real interest rate. Our approach … allows us not only to assess the uncertainty surrounding the optimal inflation target, but also to determine the latter while …
Persistent link: https://www.econbiz.de/10012927026
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Segregated balance accounts
Garratt, Rod; Martin, Antoine; McAndrews, James Joseph; … - 2015
This paper describes segregated balance accounts (SBAs), a concept for a new type of account that could provide increased competition for deposits, reduce system-wide balance sheet costs, and improve the transmission of monetary policy by facilitating greater pass-through of interest on excess...
Persistent link: https://www.econbiz.de/10010528292
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Floor systems and the Friedman rule : the fiscal arithmetic of open market operations
Keister, Todd; Martin, Antoine; McAndrews, James Joseph - 2015
In a floor system of monetary policy implementation, the central bank remunerates bank reserves at or near the market rate of interest. Some observers have expressed concern that operating such a system will have adverse fiscal consequences for the public sector and may even require the...
Persistent link: https://www.econbiz.de/10011410519
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Monetary Policy with Interest on Reserves
Cochrane, John H. - 2014
determine inflation in this regime, so I base the analysis on the fiscal theory of the price level. I find that monetary policy … can peg the nominal rate, and determine expected inflation. With sticky prices, monetary policy can also affect real … interest rates and output, though higher interest rates raise output and then inflation. The conventional sign requires a …
Persistent link: https://www.econbiz.de/10013044987
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Central bank transparency, the accuracy of professional forecasts, and interest rate volatility
Middeldorp, Menno - 2011
Central banks worldwide have become more transparent. An important reason is that democratic societies expect more openness from public institutions. Policymakers also see transparency as a way to improve the predictability of monetary policy, thereby lowering interest rate volatility and...
Persistent link: https://www.econbiz.de/10009130516
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Some Issues Concerning Interest Rate Pegging, Price Level Determinacy, and the Real Bills Doctrine
McCallum, Bennett T. - 2021
In a recent paper, Canzoneri, Henderson, and Rogoff have shown that it is possible for the monetary authority to peg the nominal interest rate without creating price level indeterminacy in a simplified version of the 1975 Sargent-Wallace model. The present paper begins by reviewing that result,...
Persistent link: https://www.econbiz.de/10013219333
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Price Level Determinacy with an Interest Rate Policy Rule and Rational Expectations
McCallum, Bennett T. - 2021
This paper reconsiders a result obtained by Sargent and Wallace, namely, that price level indeterminacy obtains in their well-known model if the monetary authorities adopt a policy feedback rule for the interest rate rather than the money stock. Since the Federal Reserve seems often to have used...
Persistent link: https://www.econbiz.de/10013219724
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Real Interest, Money Surprises and Anticipated Inflation
Makin, John H. - 2021
This paper investigates the hypothesis that surprise changes in the money supply and anticipated inflation (the Mundell … surprises and expected real interest or an inverse relationship between anticipated inflation and expected real interest. These …
Persistent link: https://www.econbiz.de/10013211690
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Federal reserve tools for managing rates and reserves
Martin, Antoine; McAndrews, James Joseph; Palida, Ali; … - 2013
Monetary policy measures taken by the Federal Reserve as a response to the 2007-09 financial crisis and subsequent economic conditions led to a large increase in the level of outstanding reserves. The Federal Open Market Committee (FOMC) has a range of tools to control short-term market rates in...
Persistent link: https://www.econbiz.de/10010201212