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Negative Nominal Interest Rates: Three ways to overcome the zero lower bound
Buiter, Willem Hendrik - National Bureau of Economic Research (NBER) - 2009
symmetry to domain over which the central bank can vary its policy rate. They are: (1) abolishing currency (which would also be …
Persistent link: https://www.econbiz.de/10005036814
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Optimal Taylor Rules in New Keynesian Models
House, Christopher; Boehm, Christoph E. - National Bureau of Economic Research (NBER) - 2014
We analyze the optimal Taylor rule in a standard New Keynesian model. If the central bank can observe the output gap … from the central bank's targets. If it observes inflation and the output gap with error, the central bank will temper its … smoothing component. Under such a Taylor rule, if the central bank is behaving optimally, the estimates of inflation and the …
Persistent link: https://www.econbiz.de/10010951201
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On the Optimal Choice of a Monetary Policy Instrument
Atkeson, Andrew; Chari, Varadarajan; Kehoe, Patrick J. - National Bureau of Economic Research (NBER) - 2007
The optimal choice of a monetary policy instrument depends on how tight and transparent the available instruments are and on whether policymakers can commit to future policies. Tightness is always desirable; transparency is only if policymakers cannot commit. Interest rates, which can be made...
Persistent link: https://www.econbiz.de/10005714373
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Understanding Policy in the Great Recession: Some Unpleasant Fiscal Arithmetic
Cochrane, John H. - National Bureau of Economic Research (NBER) - 2010
I use the valuation equation of government debt to understand fiscal and monetary policy in and following the great recession of 2008-2009, to think about fiscal pressures on US inflation, and what sequence of events might surround such an inflation. I emphasize that a fiscal inflation can come...
Persistent link: https://www.econbiz.de/10008628465
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Illiquidity and Interest Rate Policy
Diamond, Douglas W.; Rajan, Raghuram G. - National Bureau of Economic Research (NBER) - 2009
The cheapest way for banks to finance long term illiquid projects is typically to borrow short term from households. But when household needs for funds are high, interest rates will rise sharply, debtors will have to shut down illiquid projects, and in extremis, will face more damaging runs....
Persistent link: https://www.econbiz.de/10005087453
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The Heterogeneous State of Modern Macroeconomics: A Reply to Solow
Chari, Varadarajan; Kehoe, Patrick J. - National Bureau of Economic Research (NBER) - 2007
Robert Solow has criticized our 2006 Journal of Economic Perspectives essay describing "Modern Macroeconomics in Practice." Solow eloquently voices the commonly heard complaint that too much macroeconomic work today starts with a model with a single type of agent. We argue that modern...
Persistent link: https://www.econbiz.de/10005778451
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Betting the House
Jorda, Oscar; Taylor, Alan M.; Schularick, Moritz HP. - National Bureau of Economic Research (NBER) - 2014
Is there a link between loose monetary conditions, credit growth, house price booms, and financial instability? This paper analyzes the role of interest rates and credit in driving house price booms and busts with data spanning 140 years of modern economic history in the advanced economies. We...
Persistent link: https://www.econbiz.de/10011106101
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The Great Inflation: Did the Shadow Know Better?
Poole, William; Rasche, Robert H.; Wheelock, David C. - National Bureau of Economic Research (NBER) - 2011
The Shadow Open Market Committee was formed in 1973 in response to rising inflation and the apparent unwillingness of U.S. policymakers to implement policies necessary to maintain price stability. This paper describes how the Committee's policy views differed from those of most Federal Reserve...
Persistent link: https://www.econbiz.de/10008876847
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A Theory of Macroprudential Policies in the Presence of Nominal Rigidities
Farhi, Emmanuel; Werning, Iván - National Bureau of Economic Research (NBER) - 2013
We propose a theory of monetary policy and macroprudential interventions in financial markets. We focus on economies with nominal rigidities in goods and labor markets and subject to constraints on monetary policy, such as the zero lower bound or fixed exchange rates. We identify an aggregate...
Persistent link: https://www.econbiz.de/10010969453
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News Shocks
Barsky, Robert B.; Sims, Eric R. - National Bureau of Economic Research (NBER) - 2009
We implement a new approach for the identification of "news shocks" about future technology. In a VAR featuring a measure of aggregate technology and several forward-looking variables, we identify the news shock as the shock orthogonal to technology innovations that best explains future...
Persistent link: https://www.econbiz.de/10005027105