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Short-term interest rates in the United States have been near their lower bound since late 2008. Treasury rates out to a two-year maturity have been close to zero since mid-2011, and over this same period, inflation has been declining. This combination of low interest rates and declining...
Persistent link: https://www.econbiz.de/10011122478
Substantial attention has been devoted to inflation differentials within the European Monetary Union, including suggestions that inflation differentials are a policy issue for national governments. This paper investigates the ability of a region participating in a currency union to affect its...
Persistent link: https://www.econbiz.de/10005527703
We investigate the possibility of synchronized and staggered equilibria in a version of the Dotsey-King-Wolman state-dependent pricing model. Our paper contributes to a large literature that considers synchronization of price changes (see, for example, Ball and Cecchetti [1988], Ball and Romer...
Persistent link: https://www.econbiz.de/10005537516
How often do the nominal prices of individual goods change? What is the nature of costs of price adjustment? How big are these costs? Answering these questions may be important for constructing macroeconomic models that are useful for monetary policy analysis. The empirical literature reveals...
Persistent link: https://www.econbiz.de/10005443175
Bank reserves in the United States increased dramatically at the end of 2008. Subsequent asset purchase programs in 2009 and 2011 more than doubled the quantity of reserves outstanding. We study the cross-sectional distribution of reserves in that period, and the relationship between holdings of...
Persistent link: https://www.econbiz.de/10011188956
We use a vector autoregression (VAR) for the components of gross domestic product (GDP) to conduct some sectoral and temporal accounting for the current recession. It is obvious that housing played an important role in the current recession, but residential investment declined for two years...
Persistent link: https://www.econbiz.de/10010724751
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Persistent link: https://www.econbiz.de/10010733931
The Interdistrict Settlement Account (ISA) tracks financial flows across Federal Reserve Banks. This article provides an introduction to the ISA and traces its behavior, along with some other components of Reserve Bank balance sheets during the great recession and the financial crisis. We also...
Persistent link: https://www.econbiz.de/10010884916
Recent evidence on the effect of government spending shocks on consumption cannot be easily reconciled with existing optimizing business cycle models. We extend the standard New Keynesian model to allow for the presence of rule-of-thumb (non-Ricardian) consumers. We show how the interaction of...
Persistent link: https://www.econbiz.de/10010986424