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Deflationary Shocks and Monetary Rules : an Open-Economy Scenario Analysis

Laxton, Douglas - 2006

The paper considers the macroeconomic transmission of demand and supply shocks in an open economy under alternative assumptions on whether the zero interest floor (ZIF) is binding. It uses a two-country general-equilibrium simulation model calibrated to the Japanese economy vis-a-vis the rest of...

Persistent link: https://www.econbiz.de/10012465957

Two Decades of Japanese Monetary Policy and the Deflation Problem

Ito, Takatoshi - 2004

of Japan's rhetoric was not helpful in fighting deflation, and the interest rate hike in August 2000 amid deflation was a …This paper reviews Japanese monetary policy over the last two decades with an emphasis on the experience of deflation … serious mistake. Deflation can be quite costly, and a key element in both preventing and escaping deflation is the management …

Persistent link: https://www.econbiz.de/10012467811

Interest Rate Cuts vs. Stimulus Payments : An Equivalence Result

Wolf, Christian - National Bureau of Economic Research - 2021

In a textbook New Keynesian model extended to allow for uninsurable household income risk, any path of inflation and output implementable via interest rate policy is similarly implementable through uniform lump-sum transfers ("stimulus checks"). A dual-mandate policymaker can thus use checks to...

Persistent link: https://www.econbiz.de/10012616640

Consumption Heterogeneity and Monetary Policy in an Open Economy

Chen, Sihao; Devereux, Michael B.; Shi, Kang; Xu, Jenny - National Bureau of Economic Research - 2022

We explore how consumption heterogeneity affects the international transmission mechanism of monetary shocks and the choice of optimal monetary policy in an open economy. Incorporating two types of agents (Ricardian versus Keynesian) into a standard open economy macro model, we find that there...

Persistent link: https://www.econbiz.de/10013172135

Does Policy Communication During Covid Work?

Coibion, Olivier - 2020

Using a large-scale survey of U.S. households during the Covid-19 pandemic, we study how new information about fiscal and monetary policy responses to the crisis affects households' expectations. We provide random subsets of participants in the Nielsen Homescan panel with different combinations...

Persistent link: https://www.econbiz.de/10012481579

Monetary Policy and the Redistribution Channel

Auclert, Adrien - 2017

This paper evaluates the role of redistribution in the transmission mechanism of monetary policy to consumption. Three channels affect aggregate spending when winners and losers have different marginal propensities to consume: an earnings heterogeneity channel from unequal income gains, a Fisher...

Persistent link: https://www.econbiz.de/10012455230

Monetary Policy and Asset Valuation

Bianchi, Francesco - 2016

We find evidence of infrequent shifts, or "regimes," in the mean of the asset valuation variable <i>cay<sub>t</sub></i> that are strongly associated with low-frequency fluctuations in the real federal funds rate, with low policy rates associated with high asset valuations, and vice versa. There is no evidence...

Persistent link: https://www.econbiz.de/10012456107

Monetary Policy According to HANK

Kaplan, Greg - 2016

We revisit the transmission mechanism of monetary policy for household consumption in a Heterogeneous Agent New Keynesian (HANK) model. The model yields empirically realistic distributions of household wealth and marginal propensities to consume because of two key features: multiple assets with...

Persistent link: https://www.econbiz.de/10012456775

Life-cycle Forces make Monetary Policy Transmission Wealth-centric

Beaudry, Paul; Cavallino, Paolo; Willems, Tim - National Bureau of Economic Research - 2024

This paper adds life-cycle features to a New Keynesian model and shows how this places financial wealth at the center of consumption/saving decisions, thereby enriching the determinants of aggregate demand and affecting the transmission of monetary policy. As retirement preoccupations...

Persistent link: https://www.econbiz.de/10014544789

The Long and Variable Lags of Monetary Policy : Evidence from Disaggregated Price Indices

Aruoba, S. Borağan; Drechsel, Thomas - National Bureau of Economic Research - 2024

We study how monetary policy affects subcomponents of the Personal Consumption Expenditures Price Index (PCEPI) using local projections. Following a monetary policy contraction, the response of aggregate PCEPI turns significantly negative after over three years. There are stark differences in...

Persistent link: https://www.econbiz.de/10014576652

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