The Federal Reserve's objective, namely the dovish stance, is often blamed for the Great Inflation. A popular proxy for the former is constructed based on the inflation coefficients in estimated Taylor rules. However, for a welfare-optimizing central bank, the estimated Taylor coefficients are...

Using a textbook New Keynesian model extended with an inequality channel, we examine optimal monetary policy departing from the traditional utilitarian social welfare function, to consider alternative functions, including the Rawlsian approach of putting only weight to the agent with the lowest...

On 1 June 2018 the ECB celebrated its 20th anniversary. This paper provides a comprehensive view of the ECB's monetary policy over these two decades. The first section provides a chronological account of the macroeconomic and monetary policy developments in the euro area since the adoption of...

Abstract Negative interest rates policies (NIRP), usually depicted in economic textbooks as an impossibility due to the prospect of infinite demand for money, are now a reality in several countries due to different reasons. But while the ZLB has been surpassed when it comes to Central Banks, it...

This paper reconsiders the narratives surrounding Japan's economic performance since the 1980s in relation to the experiences of the U.S. and the Eurozone. There are important differences between these three economies and some striking parallels. It is found that the poor reputation of the Bank...

How to conduct macro-prudential regulation? How to coordinate monetary policy and macro-prudential policy? To address these questions, I develop a continuous-time New Keynesian economy in which a financial intermediary sector is subject to a leverage constraint. Coordination between monetary and...

On 1 June 2018 the ECB celebrated its 20th anniversary. This paper provides a comprehensive view of the ECB's monetary policy over these two decades. The first section provides a chronological account of the macroeconomic and monetary policy developments in the euro area since the adoption of...

This paper surveys the state of the art on monetary policy and central bank behaviour from a public choice perspective. After a brief look at the roots of today's view of monetary policy conduct and institutional design in early work on political business cycles, the inflation-stabilisation...

Fed’s policymakers overestimated the negative output gap, leading them to prolong the monetary expansion beyond the necessary during the pandemic. The prolonged money expansion contributed to fuel inflation during the post-recession rebound. The policy mistake was the result of an inaccurate...

The U.S. Federal Reserve has committed hundreds of billions of dollars in unprecedented lending activities and purchases of mortgage-backed securities based upon its authority under the Federal Reserve Act, and particularly upon its interpretation of Section 13(3), a formerly untested and unused...