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Optimal Monetary and Fiscal Policy in a Liquidity Trap
Eggertsson, Gauti B. - 2012
In previous work (Eggertsson and Woodford, 2003), we characterized the optimal conduct of monetary policy when a real disturbance causes the natural rate of interest to be temporarily negative, so that the zero lower bound on nominal interest rates binds, and showed that commitment to a...
Persistent link: https://www.econbiz.de/10013102000
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Optimal Monetary and Fiscal Policy : A Linear Quadratic Approach
Benigno, Pierpaolo; Woodford, Michael - 2021
We propose an integrated treatment of the problems of optimal monetary and fiscal policy, for an economy in which prices are sticky and the only available sources of government revenue are distorting taxes. Our linear-quadratic approach allows us to nest both conventional analyses of optimal...
Persistent link: https://www.econbiz.de/10013218299
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Optimal Fiscal and Monetary Policy
Chari, Varadarajan V.; Kehoe, Patrick J. - 2021
We provide an introduction to optimal fiscal and monetary policy using the primal approach to optimal taxation. We use this approach to address how fiscal and monetary policy should be set over the long run and over the business cycle. We find four substantive lessons for policymaking: Capital...
Persistent link: https://www.econbiz.de/10013230363
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Endogenous Volatility at the Zero Lower Bound : Implications for Stabilization Policy
Basu, Susanto - 2016
At the zero lower bound, the central bank's inability to offset shocks endogenously generates volatility. In this …-contingent optimal monetary and fiscal policies can attenuate this endogenous volatility by stabilizing the distribution of future … outcomes. Fluctuations in uncertainty and the zero lower bound help our model match the unconditional and stochastic volatility …
Persistent link: https://www.econbiz.de/10013002240
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Interest Rate Volatility and Monetary Policy
Walsh, Carl E. - 2021
procedure. It is argued in this paper that part of the very large increase in interest rate volatility which resulted from the …
Persistent link: https://www.econbiz.de/10013220958
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Time Consistency and the Duration of Government Debt : A Signalling Theory of Quantitative Easing
Bhattarai, Saroj - 2015
We present a signalling theory of Quantitative Easing (QE) at the zero lower bound on the short term nominal interest …
Persistent link: https://www.econbiz.de/10013019507
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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 …
Persistent link: https://www.econbiz.de/10013044987
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Consumer Durables and the Real Interest Rate
Mankiw, N. Gregory - 2021
One important channel through which real interest rates affect aggregate demand is consumer expenditure on durable goods. This paper examines empirically the link between interest rates and consumer durables. Solving for the decision rule relating income and interest rates to consumer demand is...
Persistent link: https://www.econbiz.de/10013246298
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International Trade in Durable Goods : Understanding Volatility, Cyclicality, and Elasticities
Engel, Charles M. - 2008
durable goods are traded across countries. Our model can match the business cycle statistics on the volatility and comovement …
Persistent link: https://www.econbiz.de/10012772731
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Optimal Fiscal and Monetary Policy in a Medium-Scale Macroeconomic Model : Expanded Version
Schmitt-Grohé, Stephanie; Uribe, Martín - 2021
percent per year with a volatility of 1.1 percent. This result is surprising given that the model features a number of …
Persistent link: https://www.econbiz.de/10013240563