Showing 1 - 10 of 18
Persistent link: https://www.econbiz.de/10003387481
In this paper, we examine the performance and robustness of optimised interest-rate rules in four models of the euro area which differ considerably in terms of size, degree of aggregation, relevance of forward-looking behavioural elements and adherence to micro-foundations. Our findings are...
Persistent link: https://www.econbiz.de/10003001830
Persistent link: https://www.econbiz.de/10002125159
This paper examines how money demand induced real balance effects contribute to the determination of the price level, as suggested by Patinkin (1949,1965), and if they affect conditions for local equilibrium uniqueness and stability. There exists a unique price level sequence that is consistent...
Persistent link: https://www.econbiz.de/10002817422
We study the implications of climate change and the associated mitigation measures for optimal monetary policy in a canonical New Keynesian model with climate externalities. Provided they are set at their socially optimal level, carbon taxes pose no trade-offs for monetary policy: it is both...
Persistent link: https://www.econbiz.de/10014376057
We study optimal monetary policy in a flexible state-dependent pricing framework, in which monopolistic competition and stochastic menu costs are the only distortions. We show analytically that it is optimal to commit to zero inflation in the long run. Moreover, our numerical simulations...
Persistent link: https://www.econbiz.de/10008659381
Persistent link: https://www.econbiz.de/10009765171
This paper examines monetary policy implementation in a sticky price model. The central bank's plan under discretionary optimization is entirely forward-looking and exhibits multiple equilibrium solutions if transactions frictions are not negligibly small. The central bank can then implement...
Persistent link: https://www.econbiz.de/10003162225
Persistent link: https://www.econbiz.de/10003322055
We examine an interesting puzzle in monetary economics between what monetary authorities claim (namely to be forward-looking and pre-emptive) and the poor stabilization properties routinely reported for forecast-based rules. Our resolution is that central banks should be viewed as following...
Persistent link: https://www.econbiz.de/10003337269