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Controlling Inflation With Interest Rate Rules in Models with Sticky Prices

Von zur Mühlen, Peter - 2022

This paper examines the properties of interest rate rules aimed at controlling aggregate price inflation. Policies are compared in two models having either flexible or sticky inflation The latter is assumed to derive from a traditional, adaptive-expectations augmented Phillips curve. The...

Persistent link: https://www.econbiz.de/10013404057

Structural distortions and decentralized fiscal policies in EMU

Beetsma, Roel; Bovenberg, Ary Lans - 2001

The combination of discretionary monetary policy, labor-market distortions and nominal wage rigidity yields an inflation bias as monetary policy tries to exploit nominal wage contracts to address labour-market distortions Although an inflation target eliminates this inflation bias, it creates a...

Persistent link: https://www.econbiz.de/10011398780

Sticky wages, incomplete pass-through and inflation targeting : what is the right index to target?

Abo-Zaid, Salem M. - 2009

This paper studies monetary policy rules in a small open economy with Inflation Targeting, incomplete pass-through and rigid nominal wages. The paper shows that, when nominal wages are fully flexible and pass-through is low to moderate, the monetary authority should target the consumer price...

Persistent link: https://www.econbiz.de/10011523924

Structural Distortions and Decentralized Fiscal Policies in Emu

Beetsma, Roel M. W. J.; Bovenberg, A. Lans - 2021

The combination of discretionary monetary policy, labor-market distortions and nominal wage rigidity yields an inflation bias as monetary policy tries to exploit nominal wage contracts to address labour-market distortions. Although an inflation target eliminates this inflation bias, it creates a...

Persistent link: https://www.econbiz.de/10013320952

How to starve the beast: fiscal and monetary policy rules

Martin, Fernando M. - 2019

Societies often rely on simple rules to restrict the size and behavior of governments. When fiscal and monetary policies are conducted by a discretionary and profligate government, I find that revenue ceilings vastly outperform debt, deficit and monetary rules, both in effectiveness at curbing...

Persistent link: https://www.econbiz.de/10012137093

Polcy Rules and Targets : Framing the Central Banker's Problem

Cecchetti, Stephen G. - 2009

The author presents an analytical framework for the formulation of a central bank policy rule and examines some conceptual issues relating to the current debate over the effectiveness of such rules. In discussing the move by many central banks to adopt a price-level or inflation rate target -...

Persistent link: https://www.econbiz.de/10012766874

Optimal Inflation in an Open Economy with Imperfect Competition

Arseneau, David M. - 2004

This paper uses a two-country, monetary general equilibrium model with imperfect competition to study the optimal rate of inflation in an open economy. In contrast with the closed economy literature, when policy is set non-cooperatively in the open economy, the optimality of the Friedman rule is...

Persistent link: https://www.econbiz.de/10014069597

Fiscal Histories

Cochrane, John H. - National Bureau of Economic Research - 2022

The fiscal theory states that inflation adjusts so that the real value of government debt equals the present value of … fiscal theory to interpret historical episodes, including the rise and fall of inflation in the 1970s and 1980s, the long … pegs, the ends of hyperinflations, currency crashes, and the success of inflation targets. Going forward, fiscal theory …

Persistent link: https://www.econbiz.de/10013361983

Quantitative easing : a rationale and some evidence from Japan

Wieland, Volker - 2009

This paper reviews the rationale for quantitative easing when central bank policy rates reach near zero levels in light of recent announcements regarding direct asset purchases by the Bank of England, the Bank of Japan, the U.S. Federal Reserve and the European Central Bank. Empirical evidence...

Persistent link: https://www.econbiz.de/10003947449

Did the Bundesbank Target Monetary Expansion or Inflation? Evidence from Monetary Base Growth

Vaubel, Roland - 2012

Several empirical studies have suggested that the Bundesbank has pursued inflation targets rather than monetary targets. These studies have been criticized because they do not adequately measure the deviation from target and because they use some short term interest rate as a measure of the...

Persistent link: https://www.econbiz.de/10013111019

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