Inflation in advanced economies is low by historical standards but there is no threat of deflation. Slower economic growth is caused by supply-side constraints rather than low inflation. Below-the-target inflation does not damage the reputation of central banks. Thus, central banks should not...

We analyze the importance of global shocks for the global economy and national policy makers. More specifically, we investigate whether monetary policy has become less effective in the wake of financial globalization. We also examine whether there is increasing uncertainty for central banks due...

We assess empirically whether monetary policy announcements impact firm expectations. Two features of our data set are key. First, we rely on a survey of production and price expectations of German firms, that is, expectations of actual price setters. Second, we observe the day on which firms...

This paper uses the Brazilian central bank’s loss of credibility episode under President Dilma Rousseff’s administration (2011-2014) to provide novel evidence that professional forecasters interpret monetary policy surprises differently depending on the level of central bank’s credibility....

The political transition in the Arab Spring countries has been accompanied by a deterioration of economic and financial indicators like the Tunisian case. Therefore, this paper aims to get a deeper understanding the nature of the rule that reflects the behavior of the Tunisian monetary authority...

This note proposes an update to Figure 1 in "Macroeconomic Shocks and their Propagation" in the Handbook of Macroeconomics of 2016 (Ramey, 2016). Figure 1 of Ramey (2016) reports Impulse-Response Functions (IRFs) of variables of interest to a shock in the Federal Funds Rate, following the...

Interest rate surprises around FOMC announcements reveal both the surprise in the monetary policy stance (the pure policy shock) and interest rate movements driven by exogenous information about the economy from the central bank (the information shock). In order to disentangle the effects of...

We use three different indicators based on inflation expectations to measure central bank credibility in 9 countries in Central and Eastern Europe. We quantify credibility using differences between official inflation targets and inflation expectations as well as differences between inflation...

We disentangle the effects of monetary policy announcements on real economic variables into an interest rate shock component and a central bank information shock component. We identify both components using changes in interest rate futures and in exchange rates around monetary policy...