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What Rule for the Federal Reserve? Forecast Targeting
Svensson, Lars E. O. - 2017
How would the policy rule of forecast targeting work for the Federal Reserve? To what extent is the Federal Reserve … already practicing forecast targeting? Forecast targeting means selecting a policy rate and policy-rate path so that the …, forecast targeting allows all relevant information to be taken into account and has the flexibility and robustness to adapt to …
Persistent link: https://www.econbiz.de/10012943621
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How Should Monetary Policy Be Conducted in an Era of Price Stability?
Svensson, Lars E. O. - 2021
) "forecast targeting," and (3) monetary targeting. Both (1) and (3) are found to be inferior to forecast targeting in maintaining …
Persistent link: https://www.econbiz.de/10013219290
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Optimal Interest-Rate Rules : I. General Theory
Giannoni, Marc P.; Woodford, Michael - 2021
This paper proposes a general method for deriving an optimal monetary policy rule in the case of a dynamic linear rational-expectations model and a quadratic objective function for policy. A commitment to a rule of the type proposed results in a determinate equilibrium in which the responses to...
Persistent link: https://www.econbiz.de/10013211637
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Optimal Interest-Rate Rules in a Forward-Looking Model, and Inflation Stabilization Versus Price-Level Stabilization
Giannoni, Marc P. - 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
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Shocks, Structures or Monetary Policies? The Euro Area and Us after 2001
Christiano, Lawrence J. - 2008
The US Federal Reserve cut interest rates more vigorously in the recent recession than the European Central Bank did. By comparison with the Fed, the ECB followed a more measured course of action. We use an estimated dynamic general equilibrium model with financial frictions to show that...
Persistent link: https://www.econbiz.de/10012773305
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Inflation Targeting as a Monetary Policy Rule
Svensson, Lars E. O. - 2021
The purpose of the paper is to survey and discuss inflation targeting in the context of monetary policy rules. The paper provides a general conceptual discussion of monetary policy rules, attempts to clarify the essential characteristics of inflation targeting, compares inflation targeting to...
Persistent link: https://www.econbiz.de/10013218714
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The Empirics of Monetary Policy Rules in Open Economies
Clarida, Richard - 2021
This paper was prepared as a Keynote Address for the ESRC Conference on the Future of Macroeconomics held at the Bank of England Conference Center on April 14, 2000. It uses the empirical framework for formulating and estimating forward looking monetary policy rules developed in Clarida, Gali,...
Persistent link: https://www.econbiz.de/10013220781
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Interest-Rate Rules in an Estimated Sticky Price Model
Rotemberg, Julio J.; Woodford, Michael - 2021
This paper evaluates alternative rules by which the Fed may set interest rates using the small model of the U.S. economy estimated in Rotemberg and Woodford (1997). Our main substantive finding is that low and stable inflation together with stable interest rates can be achieved by letting the...
Persistent link: https://www.econbiz.de/10013217597
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Backward-Looking Interest-Rate Rules, Interest-Rate Smoothing, and Macroeconomic Instability
Benhabib, Jess; Schmitt-Grohé, Stephanie; Uribe, Martín - 2021
The existing literature on the stabilizing properties of interest-rate feedback rules has stressed the perils of linking interest rates to forecasts of future inflation. Such rules have been found to give rise to aggregate fluctuations due to self-fulfilling expectations. In response to this...
Persistent link: https://www.econbiz.de/10013247248
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Targeting Rules for Monetary Policy
Aizenman, Joshua; Frenkel, Jacob A. - 2021
This paper develops an analytical framework for the analysis of targeting rules for monetary policy. We derive the optimal money supply rule and analyze the implications of other monetary rules including rules that target nominal GNP, the price level, the monetary growth rate and the...
Persistent link: https://www.econbiz.de/10013215376