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Persistent link: https://www.econbiz.de/10014577895
In times of stress, if the potential demand from asset managers for market liquidity approaches or exceeds dealers' ability to intermediate, it could lead to a precautionary but disruptive dash for cash and may lead central banks to intervene. If the likelihood of such a dash for cash increases...
Persistent link: https://www.econbiz.de/10015329860
Basic information on the organization, operation, and growth of the financial system helps the students and early career researchers to gain better insights and understanding of the subject. The purpose of this paper is to compile the concepts, terminologies, and definitions – used in the...
Persistent link: https://www.econbiz.de/10013404565
In this paper we assess whether forward guidance for monetary policy regarding the future path of interest rates is desirable. We distinguish between two cases where forward guidance for monetary policy may be helpful. First, forward guidance may reveal private information of the central bank....
Persistent link: https://www.econbiz.de/10011753148
Transparency has become an almost universal virtue among central banks. The paper tests empirically, for the case of the Federal Reserve, two hypotheses about central bank transparency derived from the debate of Morris and Shin (2002) and Svensson (2006). First, the paper finds that the...
Persistent link: https://www.econbiz.de/10011604867
We assess differences that emerge in Taylor rule estimations for the Fed and the ECB before and after the start of the subprime crisis. For this purpose, we apply an explicit estimate of the equilibrium real interest rate and of potential output in order to account for variations within these...
Persistent link: https://www.econbiz.de/10010208788
In this paper we assess whether forward guidance for monetary policy regarding the future path of interest rates is desirable. We distinguish between two cases where forward guidance for monetary policy may be helpful. First, forward guidance may reveal private information of the central bank....
Persistent link: https://www.econbiz.de/10003761386
The U.S. Federal Reserve (Fed) is expected to start raising policy interest rates in the near term and thus commence a tightening cycle for the first time in nearly a decade. The taper tantrum episode of May-June 2013 is a reminder that even a long anticipated change in Fed policies can trigger...
Persistent link: https://www.econbiz.de/10011389408
The Federal Reserve's muddled mandate to attain simultaneously the incompatible goals of maximum employment and price stability invites short-term-oriented discretionary policymaking inconsistent with the systematic approach needed for monetary policy to contribute best to the economy over time....
Persistent link: https://www.econbiz.de/10011327424
In this paper, I examine whether communications by the Federal Open Market Committee (FOMC) play a role in determining the types of macroeconomic news that financial markets pay attention to. To do so, I construct novel measures of the intensity with which FOMC statements and meeting minutes...
Persistent link: https://www.econbiz.de/10011764553