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Complexity and monetary policy
Orphanides, Athanasios; Wieland, Volker - 2012
The complexity resulting from intertwined uncertainties regarding model misspecification and mismeasurement of the state of the economy defines the monetary policy landscape. Using the euro area as laboratory this paper explores the design of robust policy guides aiming to maintain stability in...
Persistent link: https://www.econbiz.de/10010392194
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Contemporary Inflation Surprises and Financial Stability
Carr, Douglas - 2022
and forecasting and expectations shortfalls.With the development of inelastic inflation response in the mid-1990’s, risk … income, while, previously, the reverse was true.Another risk is the mismatch between monetary policy, with lags over a decade … long, and recent fiscal inflation with much shorter impact. Recession risk increases with mismatched monetary response to …
Persistent link: https://www.econbiz.de/10013404759
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Stability and identification with optimal macroprudential policy rules
Chatelain, Jean-Bernard; Ralf, Kirsten - 2014 - Preprint
This paper investigates the identification, the determinacy and the stability of ad hoc, "quasi-optimal" and optimal policy rules augmented with financial stability indicators (such as asset prices deviations from their fundamental values) and minimizing the volatility of the policy interest...
Persistent link: https://www.econbiz.de/10010378907
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Stability and Identification with Optimal Macroprudential Policy Rules
Chatelain, Jean-Bernard - 2014
This paper investigates the identification, the determinacy and the stability of ad hoc, "quasi-optimal" and optimal policy rules augmented with financial stability indicators (such as asset prices deviations from their fundamental values) and minimizing the volatility of the policy interest...
Persistent link: https://www.econbiz.de/10013055547
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Monetary Policy Inertia, Macroprudential Policy, and Financial Stability in a Liquidity Trap
Hasui, Kohei - 2021
After the colossal financial crisis of 2008, many monetary policy analyses have shown the profound implications for financial stability of monetary policy in a liquidity trap. This paper investigates how monetary policy in a liquidity trap affects financial stability in a New Keynesian model...
Persistent link: https://www.econbiz.de/10013240606
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Optimal monetary policy system for both macroeconomics and financial stability
Hur, Joonyoung; Oh, Hyoung Seok - In: KDI-journal of economic policy 46 (2024) 1, pp. 91-129
stability. Using VAR models, the study reveals a clear increase in risk appetite following interest rate cuts after the …
Persistent link: https://www.econbiz.de/10014496719
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Uncertainty shocks, banking frictions, and economic activity
Bonciani, Dario; Roye, Björn van - 2013
In this paper we investigate the effects of uncertainty shocks on economic activity using a Dynamic Stochastic General Equilibrium (DSGE) model with heterogenous agents and a stylized banking sector. We show that frictions in credit supply amplify the effects of uncertainty shocks on economic...
Persistent link: https://www.econbiz.de/10009761866
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Liquidity risk and monetary policy
Sauer, Stephan - 2007
This paper provides a framework to analyse emergency liquidity assistance of central banks on financial markets in response to aggregate and idiosyncratic liquidity shocks. The model combines the microeconomic view of liquidity as the ability to sell assets quickly and at low costs and the...
Persistent link: https://www.econbiz.de/10003951417
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Forecast uncertainty and the taylor rule
Bauer, Christian; Neuenkirch, Matthias - 2015
In this paper, we derive a modification of a forward-looking Taylor rule, which integrates two variables measuring the uncertainty of inflation and GDP growth forecasts into an otherwise standard New Keynesian model. We show that certainty-equivalence in New Keynesian models is a consequence of...
Persistent link: https://www.econbiz.de/10010512077
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Frictions in the Interbank Market and Uncertain Liquidity Needs : Implications for Monetary Policy Implementation
Bucher, Monika - 2014
This paper shows that depending on the distribution of banks' uncertain liquidity needs and on how monetary policy is implemented, frictions in the interbank market may reinforce the effectiveness of monetary policy. These frictions imply that with its lending and deposit facilities the central...
Persistent link: https://www.econbiz.de/10013048042