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Monetary policy, inflation outlook, and recession probabilities
Ajello, Andrea; Benzoni, Luca; Schwinn, Makena; Timmer, … - 2022
Why does the short-term slope of the yield curve predict recessions? We explore the economic forces underlying Treasury yields' fluctuations and highlight the roles of a tight monetary policy stance and expectations of lower inflation in predicting downturns. While the monetary policy stance is...
Persistent link: https://www.econbiz.de/10013279282
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Why does the yield-curve slope predict recessions?
Benzoni, Luca; Chyruk, Olena; Kelley, David - 2018
Why is an inverted yield-curve slope such a powerful predictor of future recessions? We show that a decomposition of the yield curve slope into its expectations and risk premia components helps disentangle the channels that connect fluctuations in Treasury rates and the future state of the...
Persistent link: https://www.econbiz.de/10011924714
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Monetary Policy, Inflation Outlook, and Recession Probabilities
Ajello, Andrea; Benzoni, Luca; Schwinn, Makena; Timmer, … - 2022
Why does the short-term slope of the yield curve predict recessions? We explore the economic forces underlying Treasury yields’ fluctuations and highlight the roles of a tight monetary policy stance and expectations of lower inflation in predicting downturns. While the monetary policy stance...
Persistent link: https://www.econbiz.de/10014081117
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Monetary Policy, Inflation Outlook, and Recession Probabilities
Ajello, Andrea; Benzoni, Luca; Schwinn, Makena; Timmer, … - 2022
Why does the short-term slope of the yield curve predict recessions? We explore the economic forces underlying Treasury yields’ fluctuations and highlight the roles of a tight monetary policy stance and expectations of lower inflation in predicting downturns. While the monetary policy stance...
Persistent link: https://www.econbiz.de/10013404380
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Understanding post-COVID inflation dynamics
Harding Affeld, Martín Ignacio; Lindé, Jesper; … - 2022 - Last updated: December 13, 2022
We propose a macroeconomic model with a nonlinear Phillips curve that has a flat slope when inflationary pressures are subdued and steepens when inflationary pressures are elevated. The nonlinear Phillips curve in our model arises due to a quasi-kinked demand schedule for goods produced by...
Persistent link: https://www.econbiz.de/10013466150
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Systematic monetary policy and the macroeconomic effects of shifts in loan-to-value ratios
Bachmann, Ruediger; Rüth, Sebastian - 2017
What are the macroeconomic consequences of changing aggregate lending standards in residential mortgage markets, as measured by loan-to-value (LTV) ratios? In a structural VAR, GDP and business investment increase following an expansionary LTV shock. Residential investment, by contrast, falls, a...
Persistent link: https://www.econbiz.de/10011646925
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Business cycle implications of mortgage spreads
Walentin, Karl - 2014 - September 2013 (Updated March 2014)
How do aggregate quantities at the business cycle frequency respond to shocks to the spread between residential mortgage rates and government bonds? Using a structural VAR approach, we find that mortgage spread shocks impact the real economy by both economically and statistically significant...
Persistent link: https://www.econbiz.de/10010202977
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Limited liability, asset price bubbles and the credit cycle : the role of monetary policy
Mateju, Jakub - 2015
This paper suggests that non-fundamental component in asset prices is one of the drivers of financial and credit cycle … that loose monetary policy induces loose credit conditions and leads to a rise in both fundamental and nonfundamental …, lending rate and default rate decreases. These effects reverse after several quarters, inducing a credit crunch. The credit …
Persistent link: https://www.econbiz.de/10010505148
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Monetary Policy, the Financial Cycle and Ultralow Interest Rates
Juselius, Mikael - 2018
Do the prevailing unusually and persistently low real interest rates reflect a decline in the natural rate of interest as commonly thought? We argue that this is only part of the story. The critical role of financial factors in influencing medium-term economic fluctuations must also be taken...
Persistent link: https://www.econbiz.de/10012935733
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Monetary Policy, the Financial Cycle and Ultra-Low Interest Rates
Juselius, Mikael - 2016
Do the prevailing unusually and persistently low real interest rates reflect a decline in the natural rate of interest as commonly thought? We argue that this is only part of the story. The critical role of financial factors in influencing medium-term economic fluctuations must also be taken...
Persistent link: https://www.econbiz.de/10012986636