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Financial factors in economic fluctuations

Christiano, Lawrence J.; Motto, Roberto; Rostagno, Massimo - 2010

We augment a standard monetary DSGE model to include a banking sector and financial markets. We fit the model to Euro Area and US data. We find that agency problems in financial contracts, liquidity constraints facing banks and shocks that alter the perception of market risk and hit financial...

Persistent link: https://www.econbiz.de/10003973320

Shocks, Structures or Monetary Policies? The Euro Area and US After 2001

Christiano, Lawrence J. - 2007

out to be only a slowdown, and inflation never departed from levels consistent with the ECB's quantitative definition of …

Persistent link: https://www.econbiz.de/10012776610

The Great Depression and the Friedman-Schwartz Hypothesis

Christiano, Lawrence J.; Motto, Roberto; Rostagno, Massimo - 2021

We evaluate the Friedman-Schwartz hypothesis that a more accommodative monetary policy could have greatly reduced the severity of the Great Depression. To do this, we first estimate a dynamic, general equilibrium model using data from the 1920s and 1930s. Although the model includes eight...

Persistent link: https://www.econbiz.de/10013319389

Financial Factors in Economic Fluctuations

Christiano, Lawrence J.; Motto, Roberto; Rostagno, Massimo - 2021

Persistent link: https://www.econbiz.de/10013316211

Monetary Policy and Stock Market Booms

Christiano, Lawrence J. - 2014

Historical data and model simulations support the following conclusion. Inflation is low during stock market booms, so … that an interest rate rule that is too narrowly focused on inflation destabilizes asset markets and the broader economy … role for credit growth (beyond its role in constructing the inflation forecast) would reduce the volatility of output and …

Persistent link: https://www.econbiz.de/10013069208

The Great Depression and the Friedman-Schwartz Hypothesis

Christiano, Lawrence J. - 2007

The authors evaluate the Friedman-Schwartz hypothesis--that a more accommodative monetary policy could have greatly reduced the severity of the Great Depression. To do this, they first estimate a dynamic, general equilibrium model using data from the 1920s and 1930s. Although the model includes...

Persistent link: https://www.econbiz.de/10012728640

Discouraging deviant behavior in monetary economics

Christiano, Lawrence J.; Takahashi, Yuta - 2018

Persistent link: https://www.econbiz.de/10011912289

Monetary policy and stock market boom-bust cycles

Christiano, Lawrence J.; Ilut, Cosmin; Motto, Roberto - 2008

We explore the dynamic effects of news about a future technology improvement which turns out ex post to be overoptimistic. We find that it is difficult to generate a boom-bust cycle (a period in which stock prices, consumption, investment and employment all rise and then crash) in response to...

Persistent link: https://www.econbiz.de/10003803289

Money Growth Monitoring and the Taylor Rule

Christiano, Lawrence J. - 2001

Using a series of examples, we review the various ways in which a monetary policy characterized by the Taylor rule can inject volatility into the economy. In the examples, a particular modification to the Taylor rule can reduce or even entirely eliminate the problems. Under the modified policy,...

Persistent link: https://www.econbiz.de/10012470179

Discouraging Deviant Behavior in Monetary Economics

Christiano, Lawrence J. - 2018

We consider a model in which monetary policy is governed by a Taylor rule. The model has a unique equilibrium near the steady state, but also has other equilibria. The introduction of a particular escape clause into monetary policy works like the Taylor principle to exclude the other equilibria....

Persistent link: https://www.econbiz.de/10012911713

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