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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
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Learning, Endogenous Indexation and Disinflation in the New-Keynesian Model
Wieland, Volker - 2008
This paper introduces adaptive learning and endogenous indexation in the New-Keynesian Phillips curve and studies … adaptive learning lowers the cost of disinflation. This reduction can be exploited by a gradual approach to disinflation. Firms …
Persistent link: https://www.econbiz.de/10012771761
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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
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The Signaling Effect of Raising Inflation
Barthelemy, 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
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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
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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
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On the (in-)stability and the endogeneity of the "normal" rate of capacity utilisation in a post-Keynesian/Kaleckian "monetary" distribution and growth model
Hein, Eckhard - 2006
In Kaleckian models of distribution and growth the equilibrium rate of capacity utilisation may persistently diverge from the "normal rate" of utilisation. We assess this problem following the approach by Dumenil/Levy (1999) who consider the "normal rate" of utilisation in a monetary production...
Persistent link: https://www.econbiz.de/10003744529
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Can opacity of a credible central bank explain excessive inflation?
Baeriswyl, Romain; Cornand, Camille - 2007 - First version: January 2006 - This version: December 2006
Excessive inflation is usually attributed to the lack of central bank's credibility. In this context, most of the literature considers transparency a means to establish central bank's credibility. The contribution of this paper is twofold. First, it shows that, even in the absence of...
Persistent link: https://www.econbiz.de/10003470500
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Explaining inflation-gap persistence by a Time-Varying Taylor rule
Conrad, Christian; Eife, Thomas A. - 2012 - This draft: January 2012
In a simple New Keynesian model, we derive a closed form solution for the inflation-gap persistence parameter as a function of the policy weights in the central bank’s Taylor rule. By estimating the time-varying weights that the FED attaches to inflation and the output gap, we show that the...
Persistent link: https://www.econbiz.de/10009526206
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Monetary policy and nominal rigidities under low inflation
Holden, Steinar - 2001
In most European countries, money wages are given in collective agreements or individual employment contracts, and the employer cannot unilaterally cut wages, even after the expiration of a collective agreement. Ceteris paribus, workers have a stronger bargaining position when they try to...
Persistent link: https://www.econbiz.de/10011398859