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The Other Side of Value : Good Growth and the Gross Profitability Premium
Novy-Marx, Robert - 2010
Profitability, as measured by gross profits-to-assets, has roughly the same power as book-to-market predicting the …, despite having, on average, lower book-to-markets and higher market capitalizations. Controlling for profitability also … profitability explains most earnings related anomalies, as well as a wide range of seemingly unrelated profitable trading strategies …
Persistent link: https://www.econbiz.de/10013144171
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Rule-of-Thumb Consumers and the Design of Interest Rate Rules
Galí, Jordi - 2012
We introduce rule-of-thumb consumers in an otherwise standard dynamic sticky price model, and show how their presence can change dramatically the properties of widely used interest rate rules. In particular, the existence of a unique equilibrium is no longer guaranteed by an interest rate rule...
Persistent link: https://www.econbiz.de/10013114684
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The Macroeconomic Effects of Interest on Reserves
Ireland, Peter N. - 2012
This paper uses a New Keynesian model with banks and deposits to study the macroeconomic effects of policies that pay interest on reserves. While their effects on output and inflation are small, these policies require major adjustments in the way that the monetary authority manages the supply of...
Persistent link: https://www.econbiz.de/10013100359
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Liquidity Traps and Expectation Dynamics : Fiscal Stimulus or Fiscal Austerity?
Benhabib, Jess - 2012
We examine global dynamics under infinite-horizon learning in New Keynesian models where the interest-rate rule is subject to the zero lower bound. As in Evans, Guse and Honkapohja (2008), the intended steady state is locally but not globally stable. Unstable deflationary paths emerge after...
Persistent link: https://www.econbiz.de/10013106020
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The Simple Analytics of Monetary Policy : A Post-Crisis Approach
Friedman, Benjamin M. - 2013
The standard workhorse models of monetary policy now commonly in use, both for teaching macroeconomics to students and for supporting policymaking within many central banks, are incapable of incorporating the most widely accepted accounts of how the 2007-9 financial crisis occurred and incapable...
Persistent link: https://www.econbiz.de/10013083392
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The New-Keynesian Liquidity Trap
Cochrane, John H. - 2013
In standard solutions, the new-Keynesian model produces a deep recession with deflation in a liquidity trap. The model also makes unusual policy predictions: Useless government spending, technical regress, and capital destruction have large multipliers. These predictions become larger as prices...
Persistent link: https://www.econbiz.de/10013075419
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Tight Money-Tight Credit : Coordination Failure in the Conduct of Monetary and Financial Policies
Carrillo, Julio A. - 2017
Violations of Tinbergen rule and strategic interaction undermine monetary and financial policies in a New Keynesian model with the Bernanke-Gertler accelerator. Welfare costs of risk shocks are large because of efficiency losses and income effects of costly monitoring, but they are larger under...
Persistent link: https://www.econbiz.de/10012963176
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Monetary Policy According to Hank
Kaplan, Greg - 2016
We revisit the transmission mechanism of monetary policy for household consumption in a Heterogeneous Agent New Keynesian (HANK) model. The model yields empirically realistic distributions of household wealth and marginal propensities to consume because of two key features: multiple assets with...
Persistent link: https://www.econbiz.de/10013001195
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A Model of Secular Stagnation : Theory and Quantitative Evaluation
Eggertsson, Gauti B. - 2017
This paper formalizes and quantifies the secular stagnation hypothesis, defined as a persistently low or negative natural rate of interest leading to a chronically binding zero lower bound (ZLB). Output-inflation dynamics and policy prescriptions are fundamentally different from those in the...
Persistent link: https://www.econbiz.de/10012964406
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How Important is Money in the Conduct of Monetary Policy?
Woodford, Michael - 2007
I consider some of the leading arguments for assigning an important role to tracking the growth of monetary aggregates when making decisions about monetary policy. First, I consider whether ignoring money means returning to the conceptual framework that allowed the high inflation of the 1970s....
Persistent link: https://www.econbiz.de/10012776198