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Reading the Recent Monetary History of the U.S., 1959-2007

Fernández-Villaverde, Jesús - 2010

In this paper we report the results of the estimation of a rich dynamic stochastic general equilibrium (DSGE) model of the U.S. economy with both stochastic volatility and parameter drifting in the Taylor rule. We use the results of this estimation to examine the recent monetary history of the...

Persistent link: https://www.econbiz.de/10012462722

Monetary Policy with Opinionated Markets

Caballero, Ricardo J. - 2020

interest rates. With heterogeneous data sensitivity, every macroeconomic shock has an embedded monetary policy "mistake" shock …

Persistent link: https://www.econbiz.de/10012481507

Supply-Side Policies and the Zero Lower Bound

Fernández-Villaverde, Jesús - 2011

This paper examines how supply-side policies may play a role in fighting a low aggregate demand that traps an economy at the zero lower bound (ZLB) of nominal interest rates. Future increases in productivity or reductions in mark-ups triggered by supply-side policies generate a wealth effect...

Persistent link: https://www.econbiz.de/10012461115

A Note on Temporary Supply Shocks with Aggregate Demand Inertia

Caballero, Ricardo J.; Simsek, Alp - National Bureau of Economic Research - 2022

We study optimal monetary policy during temporary supply contractions when aggregate demand has inertia and expansionary policy is constrained. In this environment, it is optimal to run the economy hot until supply recovers. Positive output gaps in the low-supply phase lessen the negative output...

Persistent link: https://www.econbiz.de/10013172115

On the Global Impact of Risk-off Shocks and Policy-put Frameworks

Caballero, Ricardo J. - 2019

Global risk-off shocks can be highly destabilizing for financial markets and, absent an adequate policy response, may trigger severe recessions. Policy responses were more complex for developed economies with very low interest rates after the Global Financial Crisis (GFC). We document, however,...

Persistent link: https://www.econbiz.de/10012479979

Asset Prices and Aggregate Demand in a "Covid-19" Shock : A Model of Endogenous Risk Intolerance and LSAPs

Caballero, Ricardo J. - 2020

following a large real (non-financial) shock; and (ii) demonstrate the effectiveness of Large Scale Asset Purchases (LSAPs) in … addressing these contractions. The key mechanism stems from heterogeneous risk tolerance: as a recessionary shock hits the … Covid-19 shock and the large response by all the major central banks provide a vivid illustration of the environment we seek …

Persistent link: https://www.econbiz.de/10012482001

Price Stickiness in Ss Models : New Interpretations of Old Results

Caballero, Ricardo J. - 2007

What is the relation between infrequent price adjustment and the dynamic response of the aggregate price level to monetary shocks? The answer to this question ranges from a one-to-one link (Calvo, 1983) to no connection whatsoever (Caplin and Spulber, 1987). The purpose of this paper is to...

Persistent link: https://www.econbiz.de/10012465711

The Term Structure of Interest Rates in a DSGE Model with Recursive Preferences

van Binsbergen, Jules - 2010

We solve a dynamic stochastic general equilibrium (DSGE) model in which the representative household has Epstein and Zin recursive preferences. The parameters governing preferences and technology are estimated by means of maximum likelihood using macroeconomic data and asset prices, with a...

Persistent link: https://www.econbiz.de/10012462760

Real interest rates, credit markets, and economic stabilization

Jenkins, Paul; Walsh, Carl E. - 1985

Persistent link: https://www.econbiz.de/10003585366

Real Interest Rate, Credit Markets, and Economic Stabilization

Jenkins, Paul - 1985

The role of a real interest rate and a credit aggregate as intermediate monetary policy targets are investigated under the assumption of rational expectations. The analysis expands a standard aggregate model to include a credit market and a market determined interest rate on bank deposits. This...

Persistent link: https://www.econbiz.de/10012477509