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Mortgage prepayment, race, and monetary policy

Gerardi, Kristopher; Willen, Paul; Zhang, David Hao - 2020

This paper documents large differences in mortgage prepayment behavior across racial and ethnic groups in the United States, which have significant implications for monetary policy, inequality, and pricing. Using a novel data set that combines administrative data on mortgage performance with...

Persistent link: https://www.econbiz.de/10012606346

Fiscal policy and inflation: Understanding the role of expectations in Mexico

Lopez-Martin, Bernabe; Ramírez de Aguilar, Alberto; … - 2018

This paper estimates a hidden Markov model where inflation is determined by government deficits financed through money … inflation expectations. The estimated sequence of monetized deficits provides an adequate account of inflation for the period … 196994. The paper then extends the model to analyze the possibility that fiscal policy can affect inflation expectations in a …

Persistent link: https://www.econbiz.de/10012616363

Fiscal expansions in the era of low real interest rates

Garga, Vaishali - 2020

Low natural real interest rates limit the power of monetary policy to revive the economy due to the zero lower bound (ZLB) on the nominal interest rate. Fiscal stabilization via higher government debt is frequently recommended as a policy to raise the natural real interest rate. This paper...

Persistent link: https://www.econbiz.de/10012606350

Monetary policy through production networks: Evidence from the stock market

Ozdagli, Ali; Weber, Michael - 2017

Monetary policy shocks have a large impact on stock prices during narrow time windows centered around press releases by the FOMC. We use spatial autoregressions to decompose the overall effect of monetary policy shocks into a direct effect and a network effect. We attribute 50 to 85 percent of...

Persistent link: https://www.econbiz.de/10012059589

Policy response to external shocks: Lessons from the crisis

Capistrán, Carlos; Cuadra, Gabriel; Ramos-Francia, Manuel - 2011

Emerging economies have been subject to abrupt reversals in capital inflows, which have adverse consequences for economic activity and financial stability. An important question for policymakers is how to respond to a sudden loss of external financing and its negative effects on the domestic...

Persistent link: https://www.econbiz.de/10010322619

Monetary rules, financial stability and welfare in a non-Ricardian framework

Adame Espinosa, Francisco - 2023

generations to analyze a channel through which fluctuations in household financial wealth influence aggregate demand. The optimal … fluctuations while simultaneously reducing variability in inflation and the output gap. The model is calibrated for the United …, in addition to inflation and output gaps, can reproduce the welfare achieved under optimal monetary policy. However, this …

Persistent link: https://www.econbiz.de/10014541062

Monetary shocks and stock returns: Identification through the impossible trinity

Ozdagli, Ali K.; Yu, Yifan - 2012

This paper attempts to identify how monetary policy shocks affect stock prices by using Mundell and Fleming's theory of the Impossible Trinity. According to this theory, it is impossible to simultaneously have a fixed exchange rate, free capital movement (an absence of capital controls), and an...

Persistent link: https://www.econbiz.de/10010343349

Financial frictions and the reaction of stock prices to monetary policy shocks

Ozdagli, Ali - 2014

This paper reveals and tests a new theoretical implication of the credit channel of monetary policy: as financial frictions (monitoring or auditing costs) increase, the reaction of stock prices to monetary policy shocks decreases. Correspondingly, towards the end of the Enron accounting scandal,...

Persistent link: https://www.econbiz.de/10010478901

The final countdown: The effect of monetary policy during "Wait-for-It" and reversal periods

Ozdagli, Ali - 2015

After a long period of loose monetary policy triggered by the Great Recession, some central banks are signaling that they will raise their policy rates soon. Previous research, for example, Bernanke and Kuttner (2005) and Ozdagli (2014), has shown that asset prices react more strongly to...

Persistent link: https://www.econbiz.de/10011754794

Show me the money: The monetary policy risk premium

Ozdagli, Ali K.; Velikov, Mihail - 2016

We study how monetary policy affects the cross-section of expected stock returns. For this purpose, we create a parsimonious monetary policy exposure (MPE) index based on observable firm characteristics that are theoretically linked to how firms react to monetary policy. We find that stocks...

Persistent link: https://www.econbiz.de/10011754824