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Anticipated alternative policy-rate paths in policy simulations

Laséen, Stefan; Svensson, Lars E. O. - 2011

This paper specifies a new convenient algorithm to construct policy projections conditional on alternative anticipated policy-rate paths in linearized dynamic stochastic general equilibrium (DSGE) models, such as Ramses, the Riksbank's main DSGE model. Such projections with anticipated...

Persistent link: https://www.econbiz.de/10008696833

Inflation targeting as a monetary policy rule

Svensson, Lars E. O. - 1998 - This version: August 1998

The purpose of the paper is to survey and discuss in ation targeting in the context of monetary policy rules. The paper provides a general conceptual discussion of monetary policy rules, attempts to clarify the essential characteristics of in ation targeting, compares in ation targeting to other...

Persistent link: https://www.econbiz.de/10010128028

Open-economy inflation targeting

Svensson, Lars E. O. - 1998 - This version: April 1998

The paper extends previous analysis of closed-economy inflation targeting to a small open economy with forward-looking aggregate supply and demand with some microfoundations, and with stylized realistic lags in the different transmission channels for monetary policy. The paper compares targeting...

Persistent link: https://www.econbiz.de/10010128040

Transparency and credibility : monetary policy with unobservable goals

Fausty, Jon; Svensson, Lars E. O. - 1998 - This version: April 1998

We define and study transparency, credibility, and reputation in a model where the central bank's characteristics are unobservable to the private sector and are inferred from the policy outcome. A low-credibility bank optimally conducts a more expansionary policy than a high-credibility bank, in...

Persistent link: https://www.econbiz.de/10010128043

Policy rules for inflation targeting

Rudebuschy, Glenn D.; Svensson, Lars E. O. - 1998

Policy rules that are consistent with inflation targeting are examined in a small macro-econometric model of the US economy. We compare the properties and outcomes of explicit "instrument rules" as well as "targeting rules". The latter, which imply implicit instrument rules, may be closer to...

Persistent link: https://www.econbiz.de/10010128044

Gains from wage flexibility and the zero lower bound

Billi, Roberto M.; Galí, Jordi - 2019

We analyze the welfare impact of greater wage flexibility while taking into account explicitly the existence of the … adverse effects of greater wage flexibility on welfare when the central bank follows a conventional Taylor rule. When demand … shocks are the driving force, the presence of the ZLB implies that an increase in wage flexibility reduces welfare even under …

Persistent link: https://www.econbiz.de/10011990051

Optimal monetary policy with r* < 0

Billi, Roberto M.; Galí, Jordi; Nakov, Anton - 2024

We study the optimal monetary policy problem in a New Keynesian economy with a zero lower bound (ZLB) on the nominal interest rate, when the steady state natural rate (r*) becomes permanently negative. We show that the optimal policy aims to approach gradually a new steady state with positive...

Persistent link: https://www.econbiz.de/10014517710

Price stability as a target for monetary policy : defining and maintaining price stability

Svensson, Lars E. O. - 1999 - This version: June 1999

This paper discusses how price stability can be defined and how price stability can be maintained in practice. Some lessons for the Eurosystem are also considered. With regard to defining price stability, the choice between price-level stability and low (including zero) inflation and the...

Persistent link: https://www.econbiz.de/10011583083