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The Determination of Long-Term Interest Rates : Implications for Monetary and Fiscal Policies

Friedman, Benjamin M. - 2021

The object of this paper is to bring to bear on financial-non financial interactions a richer approach to modeling the determination of long-term interest rates. in a series of previous papers. I have developed an alternative model based explicitly on the truism that any factor affecting...

Persistent link: https://www.econbiz.de/10013220969

Interest Rate Implications for Fiscal and Monetary Policies : A Postscript on the Government Budget Constraint

Friedman, Benjamin M. - 2021

An earlier paper by the author investigated the quantitative implications, for the effectiveness of fiscal and monetary policies, of a model treating the determination of long-term interest rates by explicitly imposing the market clearing equilibrium condition that the quantity of bonds issued...

Persistent link: https://www.econbiz.de/10013225039

Implementation of Monetary Policy : How Do Central Banks Set Interest Rates?

Friedman, Benjamin M. - 2010

variation in the supply of central bank liabilities. In effect, the announcement effect has displaced the liquidity effect as …-system, or Japan. Structural estimates of banks' reserve demand, at a frequency corresponding to the required reserve maintenance … period, show no interest elasticity for the U.S. or the Euro-system (but some elasticity for Japan). The chapter next …

Persistent link: https://www.econbiz.de/10013141286

Views on the Likelihood of Financial Crisis

Friedman, Benjamin M. - 2009

A review of major lines of thinking about developments in the 1980s bearing on the likelihood of a financial crisis in the United States supports four principal conclusions:First, financial crises have historically played a major role in large fluctuations in business activity. A financial...

Persistent link: https://www.econbiz.de/10013155886

Debt Restructuring

Friedman, Benjamin M. - 2021

What difference does it make, and for whom, whether the nonperforming debts of emerging market borrowers are restructured? This paper begins by positing a set of counterfactual conditions under which restructuring would not matter, and then shows how several ways in which the actual world of...

Persistent link: https://www.econbiz.de/10013248231

Liquidity and Expected Returns : Lessons from Emerging Markets

Bekaert, Geert - 2012

Given the cross-sectional and temporal variation in their liquidity, emerging equity markets provide an ideal setting … to examine the impact of liquidity on expected returns. Our main liquidity measure is a transformation of the proportion … of zero daily firm returns, averaged over the month. We find that our liquidity measures significantly predict future …

Persistent link: https://www.econbiz.de/10012755671

Flights to safety

Baele, Lieven; Bekaert, Geert; Inghelbrecht, Koen; Wei, Min - 2012

Despite a large and growing theoretical literature on flights to safety, there does not appear to exist an empirical characterization of flight-to-safety (FTS) episodes. Using only data on bond and stock returns, we identify and characterize flight to safety episodes for 23 countries. On...

Persistent link: https://www.econbiz.de/10011590578

Crowding Out or Crowding in? The Economic Consequences of Financing Government Deficits

Friedman, Benjamin M. - 2021

The prevailing view of the economic consequences of financing government deficits, as reflected in the recent economics literature and in recent public policy debates, reflects serious misunderstandings. Debt-financed deficits need not "crowd out" any private investment, and may even "crowd in"...

Persistent link: https://www.econbiz.de/10013233786

Forecasting with a Bayesian DSGE model : an application to the euro area

Smets, Frank; Wouters, Rafael - 2004

In monetary policy strategies geared towards maintaining price stability conditional and unconditional forecasts of inflation and output play an important role. In this paper we illustrate how modern sticky-price dynamic stochastic general equilibrium (DSGE) models, estimated using Bayesian...

Persistent link: https://www.econbiz.de/10003285769

Inflation persistence and price-setting behaviour in the euro area : a summary of the Inflation Persistence Network evidence

Altissimo, Filippo; Ehrmann, Michael; Smets, Frank - 2006

This paper provides a summary of current knowledge on inflation persistence and price stickiness in the euro area, based on research findings that have been produced in the context of the Inflation Persistence Network. The main findings are: i) Under the current monetary policy regime, the...

Persistent link: https://www.econbiz.de/10011622329