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liquidity risk, in a micro-founded search-theoretical monetary model. We calibrate the model to match the empirical aggregate …
Persistent link: https://www.econbiz.de/10003711687
We build a model for bond yields based on a small-scale representation of an economy with secular declines in inflation, the real rate and output growth. Long-run restrictions identify nominal shocks that influence long-run inflation but do not influence the long-run real rate or output growth....
Persistent link: https://www.econbiz.de/10012488074
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This paper studies the behaviors of uncertainty through the lens of several popular models of expectation formation. The full-information rational expectations model (FIRE) predicts that both the ex ante uncertainty and the variance of ex post forecast errors are equal to the conditional...
Persistent link: https://www.econbiz.de/10014475397
calibrate the size of income risk to match panel data on household income dynamics. But, for several reasons, what is measured … as risk from such data may not correspond to the risk perceived by the agent. This paper instead uses data from the … differential precautionary saving motives. I also explore the implications of the fact that the perceived risk is lower than the …
Persistent link: https://www.econbiz.de/10014456727
This paper examines the value of direct communication to households about inflation and the uncertainty around inflation statistics. All types of information about inflation are effective at immediately managing inflation expectations, with information about outlooks being more effective and...
Persistent link: https://www.econbiz.de/10014457623
This paper examines the role of monetary policy in an environment with aggregate risk and incomplete markets. In a two … optimal allocation. This policy aims to stabilize the savings rate in the economy via the effect of expected inflation on real …
Persistent link: https://www.econbiz.de/10003462957