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Describing the Fed's conduct with Taylor rules

Castelnuovo, Efrem - 2003

In this paper we estimate simple Taylor rules paying particular attention to interest rate smoothing. Following English, Nelson, and Sack (2002), we employ a model in first differences to gain some insights into the presence and signifcance of the degree of partial adjustment as opposed to a...

Persistent link: https://www.econbiz.de/10009635982

The determinants of disagreement between the FOMC and the Fed's staff : new insights based on a counterfactual interest rate

Bennani, Hamza; Kranz, Tobias; Neuenkirch, Matthias - 2017

We examine the degree and sources of disagreement between the Federal Open Market Committee (FOMC) and the Federal Reserve's (Fed's) staff about the appropriate policy rate for the period 1987-2011. For that purpose, we compute a counterfactual interest rate for the Fed's staff , based on its...

Persistent link: https://www.econbiz.de/10011752222

Determinacy and learnability of monetary policy rules in small open economies

Llosa, Gonzalo (contributor); Tuesta R., Vicente (contributor) - 2006

This paper evaluates under which conditions different Taylor-type rules lead to determinacy and expectational stability (E-stability) of rational expectations equilibrium in a simple "New Keynesian" small open economy model, developed by Gali and Monacelli (2005). In particular, we extend the...

Persistent link: https://www.econbiz.de/10003774580

Imperfect competition, monetary policy and welfare in a currency area

Lombardo, Giovanni - 2002

intensiver ist. Die optimale Geldpolitik der Zentralbank der Währungsunion wird ermittelt und mit einer einfachen Taylor … auf die Wohlfahrt und die optimale Geldpolitik. Betrachtet werden zwei Möglichkeiten, wie die Wettbewerbsintensität am … die Geldpolitik effektiver sein, wenn die Länder größere Asymmetrien aufweisen. Diese Ergebnisse legen es nahe, dass die …

Persistent link: https://www.econbiz.de/10011431763

Countercyclical versus procyclical Taylor principles

Chatelain, Jean-Bernard; Ralf, Kirsten - 2016

Assuming inflation is a forward variable in Taylor (1999) model, this paper finds opposite policy rule recommandations with counter-cyclical policy rule parameters (Taylor principle: inflation rule larger than one and bounded upwards) in the case of optimal policy under commitment versus...

Persistent link: https://www.econbiz.de/10011451810

Why are Target Interest Rate Changes so Persistent?

Coibion, Olivier - 2011

We investigate the source of the high persistence in the Federal Funds Rate relative to the predictions of simple Taylor rules. While much of the literature assumes that this reflects interest-smoothing on the part of monetary policy-makers, an alternative explanation is that it represents...

Persistent link: https://www.econbiz.de/10013131581

Oil Price Shocks and Monetary Policy in a Data-Rich Environment

Aastveit, Knut Are - 2013

This paper examines the impact of different types of oil price shocks on the U.S. economy, using a factor-augmented VAR (FAVAR) approach. The results indicate that when examining the effects of oil price shocks, it is important to account for the interaction between the oil market and the...

Persistent link: https://www.econbiz.de/10013081472

Dove or Hawk? Characterizing Monetary Policy Regime Switches in India

Hutchison, Michael M. - 2013

The past two decades have witnessed a worldwide move by emerging markets to adopt explicit or implicit inflation targeting regimes. A notable and often discussed exception to this trend, of course, is China which follows pegged exchange rate regime supported by capital controls. Another major...

Persistent link: https://www.econbiz.de/10013086517

The Role of Policy Rule Misspecification in Monetary Policy Inertia Debate

Podpiera, Jirí - 2008

Operational monetary policy rules are characterized by a parsimonious specification and are therefore prone to specification error when estimated on real data. I devise a policy rule estimation procedure, which is robust to marginal misspecification, and study the effects of specification error...

Persistent link: https://www.econbiz.de/10012724714

Stepping on a Rake : The Fiscal Theory of Monetary Policy

Cochrane, John H. - 2017

The fiscal theory of the price level can describe monetary policy. Governments can set interest rate targets and thereby affect inflation, with no change in fiscal surpluses. The same basic mechanism describes interest rate targets, forward guidance, open market operations, and quantitative...

Persistent link: https://www.econbiz.de/10012945308

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