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The credibility of the monetary policy "free lunch"

Yetman, James - 2003

Price level targeting has been proposed as an alternative to inﬂation targeting that may confer beneﬁts if a central bank sets policy under discretion, even if societyu0092s loss function is speciﬁed in terms of inﬂation (instead of price level) volatility. This paper demonstrates the...

Persistent link: https://www.econbiz.de/10009635890

On the indeterminacy of determinacy and indeterminacy

Beyer, Andreas; Farmer, Roger E. A. - 2003

A number of authors have attemted to test whether the U.S. economy is in a determinate or an indeterminate equilibrium. We argue that to answer this question, one must be impose a priori restrictions on lag length that cannot be tested. We provide examples of two economic models. Model 1...

Persistent link: https://www.econbiz.de/10009635896

Indeterminacy of rational expectations equilibria in sequential financial markets

Donati, Paola - 2003

We provide a general characterization of the structure of rational expectations equilibria of any degree of revelation for pure exchange, sequential economies, with deffinitely many states of private information, an incomplete financial market and nominal assets. We estimate the dimension of the...

Persistent link: https://www.econbiz.de/10009635915

Exchange rates and fundamentals

Engel, Charles; West, Kenneth David - 2003

Standard economic models hold that exchange rates are influenced by fundamental variables such as relative money supplies, outputs, inflation rates and interest rates. Nonetheless, it has been well documented that such variables little help predict changes in floating exchange rates u0097 that...

Persistent link: https://www.econbiz.de/10009635953

On the indeterminacy of new-Keynesian economics

Beyer, Andreas; Farmer, Roger E. A. - 2004

We study identiÞcation in a class of three-equation monetary models. We argue that these models are typically not identiÞed. For any given exactly identiffed model, we provide an algorithm that generates a class of equivalent models that have the same reduced form. We use our algorithm to...

Persistent link: https://www.econbiz.de/10009636546

evidence from a lender's pricing experiment

Alan, Sule; Dumitrescu, Ruxandra; Loranth, Gyongyi - 2011

card company. What is novel about our contribution is that we were given details of a randomized interest rate experiment …

Persistent link: https://www.econbiz.de/10009640638

Firms' investment decisions in response to demand and price uncertainty

Fuss, Catherine; Vermeulen, Philip - 2004

We estimate the effect of demand and price uncertainty on firms’ investment decisions from a panel of manufacturing … firms. Uncertainty measures are derived from firms’ subjective qualitative expectations. They are close to their theoretical … counterparts, the variances of future demand and price shocks. We find that demand uncertainty depresses planned and realized …

Persistent link: https://www.econbiz.de/10009639401

Distributional dynamics under smoothly state-dependent pricing

Costain, James; Nakov, Anton - 2011

Starting from the assumption that firms are more likely to adjust their prices when doing so is more valuable, this paper analyzes monetary policy shocks in a DSGE model with firm-level heterogeneity. The model is calibrated to retail price microdata, and inflation responses are decomposed into...

Persistent link: https://www.econbiz.de/10009640772

Investors with too many options?

Dorn, Daniel - 2010

During the last decade, markets for covered warrants (bank-issued options) have flourished in Europe and Asia. In these markets, investors often face a choice between many instruments that differ only slightly from each other. Based on retail trades in call options on the German DAX index, this...

Persistent link: https://www.econbiz.de/10009640343

The ECB's New Multi-Country Model for the euro area

Dieppe, Alistair; González Pandiella, Alberto; Hall, … - 2011

Boundedly Estimated Rationality we show this approach is compatible with the same limited information assumption that was used … to expectations formed under the assumption of strong rationality. Furthermore, we find that some variation in …

Persistent link: https://www.econbiz.de/10009640692