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Price Level Determinacy with an Interest Rate Policy Rule and Rational Expectations
McCallum, Bennett T. - 1980
This paper reconsiders a result obtained by Sargent and Wallace, namely, that price level indeterminacy obtains in their well-known model if the monetary authorities adopt a policy feedback rule for the interest rate rather than the money stock. Since the Federal Reserve seems often to have used...
Persistent link: https://www.econbiz.de/10012478574
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Non-Linear Inflation Dynamics in Menu Cost Economies
Blanco, Andres; Boar, Corina; Jones, Callum; Midrigan, … - National Bureau of Economic Research - 2024
fraction of price changes increases with inflation. They also predict implausibly large menu costs and misallocation in the …
Persistent link: https://www.econbiz.de/10014468294
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Price Level and Inflation Dynamics in Heterogeneous Agent Economies
Kaplan, Greg; Nikolakoudis, Georgios; Violante, Giovanni L. - National Bureau of Economic Research - 2023
tax and transfer systems. With constant primary deficits, there exist two steady-states, and the price level and inflation … in the long-run real interest rate, leading to higher inflation for any given monetary policy. Our work highlights the … role of household heterogeneity and market incompleteness in determining inflation …
Persistent link: https://www.econbiz.de/10014322820
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The Adding Up Problem : A Targeting Approach
Krishna, Kala - 1995
This paper looks at the problem of making multiple lending decisions which affect the supply of the product when the consequences of these lending decisions are interrelated via the effect on the world price of the product. This is termed the 'adding up problem'. It is argued that thinking of...
Persistent link: https://www.econbiz.de/10012473899
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On The Behavior of Commodity Prices
Deaton, Angus - 1990
The classical theory of commodity price determination integrates myopic supply and demand on the one hand with … non-negative, this paper derives from the theory testable implications on the behavior of prices, and makes a first …
Persistent link: https://www.econbiz.de/10012475591
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Imported Materials Prices, Wage Policy, and Macroeconomic Stabilization
Marston, Richard C. - 1983
This paper analyzes two simple wage rules that keep employment constant when there are shocks to the prices of imported materials. One rule ties nominal wages to the GNP deflator rather than the consumer price index. The second rule, followed by Japan after the second oil price shock, ties the...
Persistent link: https://www.econbiz.de/10012477843
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Limits to Arbitrage and Hedging : Evidence from Commodity Markets
Acharya, Viral V. - 2011
Motivated by the literature on limits-to-arbitrage, we build an equilibrium model of commodity markets in which speculators are capital constrained, and commodity producers have hedging demands for commodity futures. Increases (decreases) in producers' hedging demand (speculators' risk-capacity)...
Persistent link: https://www.econbiz.de/10012461784
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Bubble Troubles? Rational Storage, Mean Reversion and Runs in Commodity Prices
Bobenrieth H., Eugenio S. - 2013
High and volatile prices of major commodities have generated a wide array of analyses and policy prescriptions, including influential studies identifying price bubbles in periods of high volatility. Here we consider a model of the market for a storable commodity in which price expectations are...
Persistent link: https://www.econbiz.de/10012459625
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Informational Frictions and Commodity Markets
Sockin, Michael - 2013
This paper develops a model to analyze information aggregation in commodity markets. Through centralized trading, commodity prices aggregate dispersed information about the strength of the global economy among goods producers whose production has complementarity, and serve as price signals to...
Persistent link: https://www.econbiz.de/10012459755
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Understanding the Fiscal Theory of the Price Level
Christiano, Lawrence J. - 2000
We review the fiscal theory of the price level. We place special emphasis on the theory's implications for the …
Persistent link: https://www.econbiz.de/10012471099