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On the Optimal Inflation Rate with Capital Externality

Dong, Bingbing - 2019

This short note is to show that the strong non-superneutrality of monetary policy in Brunnermeier and Sannikov (2016) does not hold if taking into account the pecuniary externality of capital. Higher money growth rate leads to a higher level of capital but not higher growth rate of the economy...

Persistent link: https://www.econbiz.de/10012889012

Relative Price Changes and the Optimal Inflation Rate

Wolman, Alexander L. - 2016

Relative prices of some goods or sectors have long-run trends: For example, the price of services relative to goods has been rising fairly steadily for decades. Other relative prices do not have long-run trends but sometimes fluctuate dramatically from one period to the next. How should monetary...

Persistent link: https://www.econbiz.de/10012979938

Uncertainty-Induced Dynamic Inefficiency and the Optimal Inflation Rate

Jung, Kuk Mo - 2016

I construct an overlapping-generations model of money with Epstein and Zin (1989) preferences and study how aggregate output uncertainty affects the optimal rate of inflation. When money only serves as savings instruments, I find that the optimality of Friedman Rule breaks up only if agents...

Persistent link: https://www.econbiz.de/10012991471

On the Optimal Inflation Rate

Brunnermeier, Markus K. - 2016

In our incomplete markets economy financial frictions affect the optimal inflation target. Households choose portfolios consisting of risky (uninsurable) capital and money. Money is a bubbly store of value. The market outcome is constrained Pareto inefficient due to a pecuniary externality. Each...

Persistent link: https://www.econbiz.de/10012995520

On the optimal inflation rate

Brunnermeier, Markus Konrad; Sannikov, Yuliy - In: The American economic review 106 (2016) 5, pp. 484-489

Persistent link: https://www.econbiz.de/10011700131

On the Optimal Inflation Rate

Brunnermeier, Markus K. - 2016

Persistent link: https://www.econbiz.de/10012456542

Is there a Case for Price-level Targeting?

Cournède, Boris - 2009

There is a case, but there are also counter-arguments. With sufficient forward-looking behaviour among firms and households, price-level targeting can act as a powerful built-in stabiliser through automatic shifts in inflation expectations. This stabilisation mechanism reduces the need for large...

Persistent link: https://www.econbiz.de/10012444861

Monetary policy transparency, public commentary, and market perceptions about monetary policy in Canada

Siklos, Pierre L. - 2000

Die Einführung von Inflationszielen in Kanada im Jahr 1991 verdeutlichte angeblich das Ziel der Geldpolitik, nämlich … Preisstabilität. Mit der neuen Politik sollte unter anderem die Öffentlichkeit fortan den Erfolg der Geldpolitik leichter daran messen … in der öffentlichen Kommentierung der Geldpolitik seit 1991 fairer beurteilt werden.' Anhand von Kommentaren in den …

Persistent link: https://www.econbiz.de/10010295696

A comment on monetary policy and rational asset price bubbles

Allen, Franklin; Barlevy, Gadi; Gale, Douglas - 2023

Galí (2014) showed that a monetary policy rule that raises interest rates in response to bubbles can paradoxically lead to larger bubbles. This comment shows that a central bank that wants to dampen bubbles can always do so by raising interest rates aggressively enough. This result is different...

Persistent link: https://www.econbiz.de/10014316806

Great recession, slow recovery and muted fiscal policies in the US

Albonico, Alice; Tirelli, Patrizio; Paccagnini, Alessia - 2016

This paper reconsiders the role of macroeconomic shocks and policies in determining the Great Recession and the subsequent recovery in the US. The Great Recession was mainly caused by a large demand shock and by the ZLB on the interest rate policy. In contrast with previous findings, the...

Persistent link: https://www.econbiz.de/10011434680