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Federal Reserve Private Information and the Behavior of Interest Rates

Romer, Christina; Romer, David - 2021

Reserve and commercial inflation forecasts. We demonstrate that the Federal Reserve has considerable information about … inflation beyond what is known to commercial forecasters. We also provide evidence that monetary policy actions provide signals …

Persistent link: https://www.econbiz.de/10013218719

The Effectiveness of Alternative Monetary Policy Tools in a Zero Lower Bound Environment

Hamilton, James D. - 2011

This paper reviews alternative options for monetary policy when the short-term interest rate is at the zero lower bound and develops new empirical estimates of the effects of the maturity structure of publicly held debt on the term structure of interest rates. We use a model of risk-averse...

Persistent link: https://www.econbiz.de/10013127013

QE in the Future : The Central Bank's Balance Sheet in a Fiscal Crisis

Reis, Ricardo - 2016

crisis, modeled as a situation where the fiscal outlook is inconsistent with both stable inflation and no sovereign default …'s balance sheet can interfere with each of these channels, stabilizing inflation and economic activity. The power of QE comes …

Persistent link: https://www.econbiz.de/10012986689

Optimal Foreign Reserves and Central Bank Policy Under Financial Stress

Céspedes, Luis Felipe; Chang, Roberto - 2022

We study the interaction between optimal foreign reserves accumulation and central bank international liquidity provision in a small open economy under financial stress. Firms and households finance investment and consumption by borrowing from domestic financial intermediaries (banks), which in...

Persistent link: https://www.econbiz.de/10013292430

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

Optimal Interest-Rate Rules in a Forward-Looking Model, and Inflation Stabilization Versus Price-Level Stabilization

Giannoni, Marc Paolo - 2010

This paper characterizes the properties of various interest-rate rules in a basic forward-looking model. We compare simple Taylor rules and rules that respond to price-level fluctuations (called Wicksellian rules). We argue that by introducing an appropriate amount of history dependence in...

Persistent link: https://www.econbiz.de/10013143464

The Politics of Monetary Policy

Alesina, Alberto - 2010

In this paper we critically review the literature on the political economy of monetary policy, with an eye on the questions raised by the recent financial crisis. We begin with a discussion of rules versus discretion. We then examine the issue of Central Banks independence both in normal times,...

Persistent link: https://www.econbiz.de/10013145247

The Transformation and Performance of Emerging Market Economies Across the Great Divide of the Global Financial Crisis

Bordo, Michael D. - 2019

(GFC) of 2007-2008. It was greatly aided by the adoption of inflation targeting. In this paper we evaluate this convergence …

Persistent link: https://www.econbiz.de/10012861733

Central Banks and the Financial System

Giavazzi, Francesco - 2010

Financial systems are inherently fragile because of the very function which makes them valuable: liquidity transformation. Regulatory reforms can strengthen the financial system and decrease the risk of liquidity crises, but they cannot eliminate it completely. This leaves monetary policy with a...

Persistent link: https://www.econbiz.de/10013139754

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

Friedman, Benjamin M. - 2010

Central banks no longer set the short-term interest rates that they use for monetary policy purposes by manipulating the supply of banking system reserves, as in conventional economics textbooks; today this process involves little or no variation in the supply of central bank liabilities. In...

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