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An investigation of the gains from commitment in monetary policy
Schaumburg, Ernst (contributor);  … - 2003 - [Elektronische Ressource]
degrees of credibility, in which commitment and discretion become special cases of what we call quasi commitment. The monetary … measure of the (lack of) credibility of the monetary policy authority, we investigate the welfare effect of a marginal … increase in credibility. Our main finding is that, in a simple model of the monetary transmission mechanism, most of the gains …
Persistent link: https://www.econbiz.de/10001783067
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Floor systems and the Friedman rule : the fiscal arithmetic of open market operations
Keister, Todd; Martin, Antoine; McAndrews, James Joseph - 2015
In a floor system of monetary policy implementation, the central bank remunerates bank reserves at or near the market rate of interest. Some observers have expressed concern that operating such a system will have adverse fiscal consequences for the public sector and may even require the...
Persistent link: https://www.econbiz.de/10011410519
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Monetary policy, financial conditions, and financial stability
Adrian, Tobias; Liang, Jean Nellie - 2014
In the conduct of monetary policy, there exists a risk-return trade-off between financial conditions and financial stability, which complements monetary policy's traditional trade-off between inflation and real activity. The trade-off exists even if monetary policy does not target financial...
Persistent link: https://www.econbiz.de/10010404524
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Monetary policy implementation frameworks : a comparative analysis
Martin, Antoine (contributor); Monnet, Cyril (contributor) - 2008
We compare two stylized frameworks for the implementation of monetary policy. The first framework relies only on standing facilities, and the second one relies only on open market operations. We show that the Friedman rule cannot be implemented in the first framework, but can be implemented...
Persistent link: https://www.econbiz.de/10003781450
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Central bank transparency and nonlinear learning dynamics
Eusepi, Stefano (contributor) - 2008
Central bank communication plays an important role in shaping market participants’ expectations. This paper studies a simple nonlinear model of monetary policy in which agents have incomplete information about the economic environment. It shows that agents’ learning and the dynamics of the...
Persistent link: https://www.econbiz.de/10003781685
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CONDI : a cost-of-nominal-distortions index
Eusepi, Stefano (contributor); Hobijn, Bart (contributor);  … - 2009
We construct a price index with weights for the prices of different PCE (personal consumption expenditures) goods chosen to minimize the welfare costs of nominal distortions. In this cost-of-nominal-distortions index (CONDI), the weights are computed in a multi-sector New Keynesian model with...
Persistent link: https://www.econbiz.de/10003812575
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Bank liquidity, interbank markets, and monetary policy
Freixas, Xavier; Martin, Antoine; Skeie, David - 2009
A major lesson of the recent financial crisis is that the interbank lending market is crucial for banks that face uncertainty regarding their liquidity needs. This paper examines the efficiency of the interbank lending market in allocating funds and the optimal policy of a central bank in...
Persistent link: https://www.econbiz.de/10003864510
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Repo market effects of the term securities lending facility
Fleming, Michael J.; Hrung, Warren B.; Keane, Frank M. - 2010
The Term Securities Lending Facility (TSLF) was introduced by the Federal Reserve to promote liquidity in the financing markets for Treasury and other collateral. We evaluate one aspect of the program — the extent to which it has narrowed repo spreads between Treasury collateral and less...
Persistent link: https://www.econbiz.de/10003948796
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Large-scale asset purchases by the Federal Reserve : did they work?
Gagnon, Joseph E.; Raskin, Matthew; Remache, Julie; … - 2010
Since December 2008, the Federal Reserve’s traditional policy instrument, the target federal funds rate, has been effectively at its lower bound of zero. In order to further ease the stance of monetary policy as the economic outlook deteriorated, the Federal Reserve purchased substantial...
Persistent link: https://www.econbiz.de/10003948813
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The central-bank balance sheet as an instrument of monetary policy
Cúrdia, Vasco; Woodford, Michael - 2010
While many analyses of monetary policy consider only a target for a short-term nominal interest rate, other dimensions of policy have recently been of greater importance: changes in the supply of bank reserves, changes in the assets acquired by central banks, and changes in the interest rate...
Persistent link: https://www.econbiz.de/10008657197