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Central Bank and Government in a Speculative Attack Model
Cappelletti, Giuseppe - 2013
This paper studies the interaction between monetary and fiscal authorities while investors are coordinating on a speculative attack. The authorities want to achieve specific targets for output and inflation but also to avoid a regime change (i.e. sovereign default). They use the traditional...
Persistent link: https://www.econbiz.de/10013072609
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Managing Expectations
Lindstädt, René; Staton, Jeffrey K. - 2010
Followers of law, politics and business commonly relate stories of individuals who appear to predict an expected self-performance level below what they believe likely. Candidates, attorneys and firms sometimes seem to under-predict their own capacities. Insofar as individuals typically construct...
Persistent link: https://www.econbiz.de/10014047090
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Do Old Habits Die Hard? Central Banks and the Bretton Woods Gold Puzzle
Monnet, Eric - 2019
Why did monetary authorities hold large gold reserves under Bretton Woods (1944-1971) when only the US had to? We argue that gold holdings were driven by institutional memory and persistent habits of central bankers. Countries continued to back currency in circulation with gold reserves,...
Persistent link: https://www.econbiz.de/10012864107
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What drives long-term interest rates? : evidence from the entire Swiss franc history 1852-2020
Hauzenberger, Niko; Kaufmann, Daniel; Stuart, Rebecca; … - 2022
We study domestic and international drivers of long-term interest rates using newly compiled financial market data for Switzerland starting in 1852. We use a time-varying parameter vector autoregressive model to estimate long-term trends in nominal interest rates, exchange rate growth, and...
Persistent link: https://www.econbiz.de/10013175583
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Exchange rates and monetary spillovers
Plantin, Guillaume; Shin, Hyun Song - In: Theoretical economics : TE ; an open access journal in … 13 (2018) 2, pp. 637-666
When do flexible exchange rates prevent monetary and financial conditions from spilling over across currencies? We examine a model in which international investors strategically supply capital to a small inflation-targeting economy with flexible exchange rates. For some combination of...
Persistent link: https://www.econbiz.de/10011856706
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Government and Central Bank Interaction Under Uncertainty : A Differential Games Approach
Engwerda, Jacob C. - 2016
monetary authorities should deal with this uncertainty is very important. Especially for some developing countries such as Iran …, in which on average 60 percent of government revenues comes from oil, and consequently uncertainty about oil prices has a …-response policy configuration if policymakers are confronted with uncertainty seems to depend on the level of anticipated uncertainty …
Persistent link: https://www.econbiz.de/10012995799
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Inflationary Bias in a Simple Stochastic Economy
Karatzas, Ioannis; Shubik, Martin; Sudderth, William D.; … - 2003
We construct explicit equilibria for strategic market games used to model an economy with fiat money, one nondurable commodity, countably many time- periods, and a continuum of agents. The total production of the commodity is a random variable that fluctuates from period to period. In each...
Persistent link: https://www.econbiz.de/10014123415
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The Harmonic Fisher Equation and the Inflationary Bias of Real Uncertainty
Karatzas, Ioannis; Shubik, Martin; Sudderth, William D.; … - 2003
between the nominal and real interest rates. We extend this equation to a representative agent economy with real uncertainty …
Persistent link: https://www.econbiz.de/10014081212
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India's trilemma : financial liberalization, exchange rates and monetary policy
Hutchison, Michael M.; Sengupta, Rajeswari; Singh, Nirvikar - 2010
A key challenge for macroeconomic policy in open economies is how to simultaneously manage exchange rates, interest rates and capital account openness - the trilemma. This paper calculates a trilemma index for India and investigates its evolution over time. We find that financial integration has...
Persistent link: https://www.econbiz.de/10008698332
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Do central banks respond to exchange rate movements? : some new evidence from structural estimation
Dong, Wei (contributor) - 2008
This paper investigates the impact of exchange rate movements on the conduct of monetary policy in Australia, Canada, New Zealand and the United Kingdom. We develop and estimate a structural general equilibrium two-sector model with sticky prices and wages and limited exchange rate pass-through....
Persistent link: https://www.econbiz.de/10003749237