Showing 1 - 10 of 908
We exploit the unexpected announcement of an immediate, temporary VAT cut in Germany in the second half of 2020 as a natural experiment to study the spending response to unconventional fiscal policy. We use survey and scanner data on households' consumption expenditures and their perceived...
Persistent link: https://www.econbiz.de/10012668478
Using representative household surveys conducted during the COVID-19 pandemic in two emerging economies, Thailand and Vietnam, we examine the relationship between inflation expectations and consumption. In both countries, our results show an insignificant relationship between expected inflation...
Persistent link: https://www.econbiz.de/10014530766
Since the 2001 recession, average core inflation has been below the Federal Reserve's 2% target. This deflationary bias is a predictable consequence of a low nominal interest rates environment. When monetary policy faces the risk of encountering the zero lower bound, in.ation tends to remain...
Persistent link: https://www.econbiz.de/10012429401
Yes, indeed; at least for macroeconomic policy interaction. We examine a Neo-Classical economy and provide the conditions for policy arrangements to successfully stabilize the economy when agents have either rational or adaptive expectations. For a contemporaneous-data monetary policy rule, the...
Persistent link: https://www.econbiz.de/10011513023
This study analyses the aspect of inflation expectations management in the context of inflation targeting by particularly focusing on the impact of exchange rate pass-through to inflation expectations in a small open economy. We also augment the inflation expectations function with GDP,...
Persistent link: https://www.econbiz.de/10012871795
Rising government debt levels around the world are raising the specter that authorities might seek to inflate away the debt. In theoretical settings where fiscal policy “dominates” monetary policy, higher debt without offsetting changes in primary surpluses should lead households to...
Persistent link: https://www.econbiz.de/10013245457
Since the 2001 recession, average core inflation has been below the Federal Reserve's 2% target. This deflationary bias is a predictable consequence of a low nominal interest rates environment. When monetary policy faces the risk of encountering the zero lower bound, in.ation tends to remain...
Persistent link: https://www.econbiz.de/10012058198
We explore the dynamics of inflation, inflation expectations, and seigniorage-financed fiscal deficits in Mexico. To do so, we estimate the model in Sargent, Williams, and Zha (2009) using Mexican CPI inflation data. This model features dual expected inflation equilibriums and regime switching...
Persistent link: https://www.econbiz.de/10012165948
In this paper, we examine how economic shocks affect the distribution of household inflation expectations. We show that the dynamics of households' expected inflation distributions are driven by three distinctive functional shocks, which influence the expected inflation distribution through...
Persistent link: https://www.econbiz.de/10014079902
U.S. long-term treasury debt serves the important role of safe and liquid assets in the economy, hence carrying significant convenience yields. We present two new findings relating the convenience yield to inflation and government fiscal policy. First, the convenience yield of treasury debt is...
Persistent link: https://www.econbiz.de/10013295890