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Policy and Macro Signals as Inputs to Inflation Expectation Formation

Maule, Becky - 2016

How do private agents interpret central bank actions and communication? To what extent do the effects of monetary shocks depend on the information disclosed by the central bank? This paper investigates the effect of monetary shocks and shocks to the Bank of England's inflation and output...

Persistent link: https://www.econbiz.de/10013000574

Central bank learning and monetary policy

Tesfaselassie, Mewael F. - 2008

effect of surprise inflation on aggregate demand. We derive the optimal policy under active learning and compare it to two … limiting cases-certainty equivalence policy and cautionary policy, in which learning takes place passively. Our novel result is … that the two passive learning policies represent an upper and lower bound for the active learning policy, irrespective of …

Persistent link: https://www.econbiz.de/10010263516

Optimized Taylor Rules for Disinflation When Agents are Learning

Cogley, Timothy; Matthes, Christian; Sbordone, Argia M. - Federal Reserve Bank of Richmond - 2014

Highly volatile transition dynamics can emerge when a central bank disinflates while operating without full transparency. In our model, a central bank commits to a Taylor rule whose form is known but whose coefficient are not. Private agents learn about policy parameters via Bayesian updating....

Persistent link: https://www.econbiz.de/10010758362

The Signalling Content of Asset Prices for Inflation : Implications for Quantitative Easing

de Haan, Leo - 2016

We investigate the information content of financial variables as signalling devices of two abnormal inflationary …

Persistent link: https://www.econbiz.de/10012986084

The Signaling Effect of Raising Inflation

Barthélémy, Jean - 2017

This paper argues that central bankers should temporarily raise inflation when anticipating liquidity traps to signal their credibility to forward guidance policies. As stable inflation in normal times either stems from central banker's credibility, e.g. through reputation, or from his aversion...

Persistent link: https://www.econbiz.de/10012968819

On determinacy and learnability in a New Keynesian model with unemployment

Tesfaselassie, Mewael F.; Schaling, Eric - 2009

We analyze determinacy and stability under learning (E-stability) of rational expectations equilibria in the Blanchard …

Persistent link: https://www.econbiz.de/10010265227

Future of the Economic and Monetary Union

Gortsos, Christos V. - 2022

The present paper contains a brief presentation and analysis, in a historical perspective through the lens of the recent major crises, of the legal framework governing the European Economic and Monetary Union (EMU), as well as current developments and challenges ahead. It is structured in three...

Persistent link: https://www.econbiz.de/10014077291

A note on temporary supply shocks with aggregate demand inertia

Caballero, Ricardo J.; Simsek, Alp - 2022

We study optimal monetary policy during temporary supply contractions when aggregate demand has inertia and expansionary policy is constrained. In this environment, it is optimal to run the economy hot until supply recovers. Positive output gaps in the low-supply phase lessen the negative output...

Persistent link: https://www.econbiz.de/10012886884

Chapter 3. Money and Inflation : Some Critical Issues

McCallum, Bennett T.; Nelson, Edward - In: Handbook of monetary economics : volume 3, (pp. 97-153). 2010

We consider what, if any, relationship there is between monetary aggregates and inflation, and whether there is any substantial reason for modifying the current mainstream mode of policy analysis, which frequently does not consider monetary aggregates at all. We begin by considering the body of...

Persistent link: https://www.econbiz.de/10014025677

Greenflation?

Olovsson, Conny; Vestin, David - 2023 - updated May 2023

What are the real and nominal implications of a green transition to a state with sustainable energy production, and how should monetary policy react during such transition? Using a New-Keynesian model with an energy and a goods sector, we show that a green transition requires the relative price...

Persistent link: https://www.econbiz.de/10013548924