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How does the ECB allot liquidity in its weekly main refinancing operations?
Ejerskov, Steen; Moss, Clara Martin; Stracca, Livio - 2003
This paper provides a simple weekly model of the regular supply of liquidity in the euro area, with a view to understanding the functioning of the euro area money market. The main result of the analysis is that liquidity has normally been provided by the ECB in a neutral and smooth manner, but...
Persistent link: https://www.econbiz.de/10009635957
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The optimal degree of discretion in monetary policy
Athey, Susan; Atkeson, Andrew; Kehoe, Patrick J. - 2004
inconsistency problem arising from the temptation to stimulate the economy with unexpected inflation. Although this dynamic … mechanism design problem seems complex, society can implement the optimal policy simply by legislating an inflation cap that … specifies the highest allowable inflation rate. The more severe the time inconsistency problem, the more tightly the cap …
Persistent link: https://www.econbiz.de/10009639392
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Indeterminacy with inflation-forecast-based rules in a two-bloc model
Batini, Nicoletta; Levine, Paul; Pearlman, Joseph - 2004
We examine the performance of forward-looking inflation-forecast-based rules in open economies. In a New Keynesian two … the feedback parameter on inflation if the forecast horizon lies too far into the future. Second, the problem of … central banks respond to expected consumer, rather than pro- ducer price inflation. …
Persistent link: https://www.econbiz.de/10009639394
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Exchange-rate policy and the zero bound on nominal interest rates
Coenen, Günter; Wieland, Volker - 2004
In this paper, we study the effectiveness of monetary policy in a severe recession and deflation when nominal interest rates are bounded at zero. We compare two alternative proposals for ameliorating the effect of the zero bound: an exchange-rate peg and price-level targeting. We conduct this...
Persistent link: https://www.econbiz.de/10009639404
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Interest rate determination in the interbank market
Gaspar, Vítor; Pérez Quirós, Gabriel; Rodríguez … - 2004
The purpose of this paper is to study the determinants of equilibrium in the market for daily funds. We use the EONIA panel database which includes daily information on the lending rates applied by contributing commercial banks. The data clearly shows an increase in both the time series...
Persistent link: https://www.econbiz.de/10009639405
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Excess reserves and implementation of monetary policy of the ECB
Bindseil, Ulrich; Camba-Mendez, Gonzalo; Hirsch, Astrid; … - 2004
This paper explains to what extent excess reserves are and should be relevant today in the implementation of monetary policy, focusing on the specific case of the operational framework of the Eurosystem. In particular, this paper studies the impact that changes to the operational framework for...
Persistent link: https://www.econbiz.de/10009639415
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Asset price booms and monetary policy
Detken, Carsten; Smets, Frank - 2004
The paper aims at deriving some stylised facts for financial, real, and monetary policy developments during asset price booms by means of aggregating information contained in 38 boom periods since the 1970s for 18 OECD countries. We observe 26 macroeconomic variables in a pre-boom, boom and...
Persistent link: https://www.econbiz.de/10009639418
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Explicit inflation objectives and macroeconomic outcomes
Levin, Andrew T.; Natalucci, Fabio M.; Piger, Jeremy M. - 2004
We find evidence that adopting an explicit inflation objective plays a role in anchoring long-run inflation … expectations and in reducing the intrinsic persistence of inflation. For the period 1994-2003, private-sector long-run inflation … forecasts exhibit significant correlation with lagged inflation for a number of industrial economies, including the United …
Persistent link: https://www.econbiz.de/10009639437
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The determinants of the overnight interest rate in the euro area
Moschitz, Julius - 2004
The overnight interest rate is the price paid for one day loans and defines the short end of the yield curve. It is the equilibrium outcome of supply and demand for bank reserves. This paper models the intertemporal decision problems in the reserve market for both central and commercial banks....
Persistent link: https://www.econbiz.de/10009639453
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How does the ECB target inflation?
Surico, Paolo - 2003
positive and negative deviations of inflation and output gaps. The empirical analysis on aggregated Euro area data indicates …
Persistent link: https://www.econbiz.de/10009639838