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The natural rate hypothesis and real determinacy
Meyer-Gohde, Alexander (contributor) - 2008
The uniqueness of bounded local equilibria under interest rate rules is analyzed in a model with sticky information `a … determinacy in the associated full-information, flex-price equivalent. The analysis follows from boundedness considerations on the …. -- Nonautonomous difference equations ; indeterminacy ; Taylor rule ; sticky information ; sticky prices …
Persistent link: https://www.econbiz.de/10003770783
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Price level targeting and risk management
Billi, Roberto M. - 2015
Many argue that, in the presence of a lower bound on nominal interest rates, central banks should use a risk management approach for setting policy, which implies commit- ting to a more expansionary policy to deal with uncertainty about the economic recovery. Using a standard model for monetary...
Persistent link: https://www.econbiz.de/10011287540
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Price Level Targeting and Risk Management
Billi, Roberto M. - 2015
Many argue that, in the presence of a lower bound on nominal interest rates, central banks should use a risk management approach for setting policy, which implies committing to a more expansionary policy to deal with uncertainty about the economic recovery. Using a standard model for monetary...
Persistent link: https://www.econbiz.de/10013018823
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The Central Bank as a Risk Manager : Quantifying and Forecasting Inflation Risks
Kilian, Lutz; Manganelli, Simone - 2021
We propose to regard the central banker as a risk manager who aims to contain inflation within pre-specified bounds. We develop formal tools of risk management that may be used to quantify and forecast the risks of failing to attain that objective. We illustrate the use of these risk measures in...
Persistent link: https://www.econbiz.de/10013319941
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The hockey stick Phillips curve and the effective lower bound
Böhl, Gregor; Lieberknecht, Philipp - 2021
We show that if business cycles are driven by financial shocks, the interplay between the effective lower bound (ELB) and the costs of external financing can generate an additional supply-side channel, which causes a disconnect between inflation and output. In normal times, factor costs dominate...
Persistent link: https://www.econbiz.de/10012792813
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Can we identify the Fed's preferences?
Chatelain, Jean-Bernard; Ralf, Kirsten - 2017 - [Updated version]
Durbin (1970) pre-tests of Ramsey optimal policy versus time-consistent policy rejects time-consistent policy and optimal simple rule for the U.S. Fed during 1960 to 2006, assuming the reference new-Keynesian Phillips curve transmission mechanism with auto-correlated cost-push shock, including...
Persistent link: https://www.econbiz.de/10011721067
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Can we identify the fed's preferences?
Chatelain, Jean-Bernard; Ralf, Kirsten - 2017
A pre-test of Ramsey optimal policy versus time-consistent policy rejects time-consistent policy and (optimal) simple rule for the U.S. Fed during 1960 to 2006, assuming the reference new-Keynesian Phillips curve transmission mechanism with auto-correlated cost-push shock. The number of reduced...
Persistent link: https://www.econbiz.de/10011597921
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The hockey stick Phillips curve and the zero lower bound
Böhl, Gregor; Lieberknecht, Philipp - 2021
The recently observed disconnect between inflation and economic activity can be explained by the interplay between the zero lower bound (ZLB) and the costs of external financing. In normal times, credit spreads and the nominal interest rate balance out; factor costs dominate firms' marginal...
Persistent link: https://www.econbiz.de/10012432969
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Generalizing Determinacy under Monetary and Fiscal Policy Switches : The Case of the Zero Lower Bound
Cho, Seonghoon - 2020
In a fixed-regime setting, it is known since Leeper (1991) that both monetary dominance (mix of active monetary and passive fiscal policies) and fiscal dominance (mix of active fiscal and passive monetary policy) regimes yield a determinate unique equilibrium. This paper shows that in a...
Persistent link: https://www.econbiz.de/10012847919
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Imperfect Credibility versus No Credibility of Optimal Monetary Policy
Chatelain, Jean-Bernard; Ralf, Kirsten - 2020
A minimal central bank credibility, with a non-zero probability of not renegning his commitment ("quasi-commitment"), is a necessary condition for anchoring inflation expectations and stabilizing inflation dynamics. By contrast, a complete lack of credibility, with the certainty that the policy...
Persistent link: https://www.econbiz.de/10014112412