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Monetary and Fiscal Stimuli, Ownership Structure, and China's Housing Market
Deng, Yongheng - 2011
, China's stimulus boosted real GDP growth from an annualized 6.2% in the first quarter of 2009 trough to 11.9% in the first … speed and efficacy of China's stimulus derives from state control over its banking system and corporate sector. Beijing …, fueling a real estate bubble; and that China's seemingly highly effective macroeconomic stimulus package may well have induced …
Persistent link: https://www.econbiz.de/10013128599
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Is the Fiscal Theory of the Price Level Learnable?
McCallum, Bennett T. - 2010
This paper presents a prototype model for development of the fiscal theory of the price level.' In this simple setting, the fiscal theory's distinctiveness relies upon adoption of a bubble solution, rather than the rational-expectations fundamentals solution. The paper then shows that the fiscal...
Persistent link: https://www.econbiz.de/10013136352
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Monetary Policy Mistakes and the Evolution of Inflation Expectations
Orphanides, Athanasios - 2011
What monetary policy framework, if adopted by the Federal Reserve, would have avoided the Great Inflation of the 1960s and 1970s? We use counterfactual simulations of an estimated model of the U.S. economy to evaluate alternative monetary policy strategies. We show that policies constructed...
Persistent link: https://www.econbiz.de/10013124836
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A Monetary Policy Rule for Automatic Prevention of a Liquidity Trap
McCallum, Bennett T. - 2012
In analyses of "liquidity trap" problems associated with the zero lower bound (ZLB) on nominal interest rates, it is important to emphasize the difference between policy rule changes, intended to help escape an existing ZLB situation, and maintained policy rules designed so as to avoid ZLB...
Persistent link: https://www.econbiz.de/10013100640
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Determinacy, Learnability, Plausibility, and the Role of Money in New Keynesian Models
McCallum, Bennett T. - 2012
Recent mainstream monetary policy analysis focuses on rational expectation solutions that are uniquely stable. A number of recent studies have examined the question of whether typical New Keynesian (NK) models, with policy rules that satisfy the Taylor principle, also exhibit solutions with...
Persistent link: https://www.econbiz.de/10013103815
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The Effect of Conventional and Unconventional Monetary Policy Rules on Inflation Expectations : Theory and Evidence
Farmer, Roger E. A. - 2012
This paper has three parts. Part 1 constructs a classical economic model of inflation, augmented by a complete set of financial markets; I call this the core monetary model. Part 2 develops a series of calibrated examples to illustrate how the core monetary model explains the history of...
Persistent link: https://www.econbiz.de/10013107515
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Indeterminacy in a Forward Looking Regime Switching Model
Farmer, Roger E. A. - 2006
This paper is about the properties of Markov switching rational expectations (MSRE) models. We present a simple monetary policy model that switches between two regimes with known transition probabilities. The first regime, treated in isolation, has a unique determinate rational expectations...
Persistent link: https://www.econbiz.de/10012779321
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Exchange Rates and Fundamentals
Engel, Charles M. - 2004
We show analytically that in a rational expectations present value model, an asset price manifests near random walk behavior if fundamentals are I(1) and the factor for discounting future fundamentals is near one. We argue that this result helps explain the well known puzzle that fundamental...
Persistent link: https://www.econbiz.de/10012785468
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Determinacy, Learnability, and Plausibility in Monetary Policy Analysis : Additional Results
McCallum, Bennett T. - 2010
In a very broad class of dynamic linear models, if agents possess knowledge of current endogenous variables in a least-squares learning process, determinacy of a rational expectations (RE) equilibrium is sufficient but not necessary for learnability of that equilibrium. Thus, since learnability...
Persistent link: https://www.econbiz.de/10012758599
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Monetary Policy Analysis When Planning Horizons are Finite
Woodford, Michael - 2018
It is common to analyze the effects of alternative monetary policy commitments under the assumption of fully model-consistent expectations. This implicitly assumes unrealistic cognitive abilities on the part of economic decision makers. The relevant question, however, is not whether the...
Persistent link: https://www.econbiz.de/10012917036