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The optimal inflation rate with discount factor heterogeneity
Lepetit, Antoine - 2018
choose a path for the inflation rate that ends with a non-zero value. Such a property is relevant in a wide range of … youth structure. In this setting, profit flows are discounted more heavily than utility flows and the optimal inflation … long-run inflation rate in models with firm entry and exit and in environments with search and matching frictions in the …
Persistent link: https://www.econbiz.de/10012016683
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Inflation Expectations of Households and Portfolio Rebalancing : Evidence from Inflation Targeting in India
Agarwal, Sumit; Chua, Yeow Hwee; Ghosh, Pulak; Song, … - 2022
This paper exploits a natural experiment in India – Inflation Targeting to study how changes in inflation expectations … influence households’ consumption, savings, and investments in risky assets. Using regional heterogeneity in inflation … expectations by city and city-age-gender bins due to the Inflation Targeting policy, we provide evidence of portfolio rebalancing …
Persistent link: https://www.econbiz.de/10013293613
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On the Optimal Inflation Rate with Capital Externality
Dong, Bingbing - 2019
This short note is to show that the strong non-superneutrality of monetary policy in Brunnermeier and Sannikov (2016) does not hold if taking into account the pecuniary externality of capital. Higher money growth rate leads to a higher level of capital but not higher growth rate of the economy...
Persistent link: https://www.econbiz.de/10012889012
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Inflation-sensitive assets : Instruments and strategies
Perrucci, Stefania (contributor) - 2012
Persistent link: https://www.econbiz.de/10011386993
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Monetary Policy During Liquidity Dry-Ups
Fiesel, Stefan - 2017
downward spiral after an unexpected arrival of a financial market illiquidity shock. In order to uncover this transmission …
Persistent link: https://www.econbiz.de/10012949651
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Monetary policy and asset price overshooting: a rationale for the Wall/Main Street disconnect
Caballero, Ricardo J.; Simsek, Alp - 2022
We analyze optimal monetary policy and its implications for asset prices, when aggregate demand has inertia and responds to asset prices with a lag. If there is a negative output gap, the central bank optimally overshoots aggregate asset prices (asset prices are initially pushed above their...
Persistent link: https://www.econbiz.de/10013093040
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Stabilizing an unstable economy : on the choice of proper policy measures
Asada, Tōichirō; Chiarella, Carl; Flaschel, Peter; … - 2009
Currently, many monetary and fiscal policy measures are aimed at preventing the financial market meltdown that started in the US subprime sector and has spread worldwide as a great recession. Although some slow recovery appears to be on the horizon, it is worthwhile exploring the fragility and...
Persistent link: https://www.econbiz.de/10003905077
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Stabilizing an unstable economy : on the choice of proper policy measures
Asada, Tōichirō; Chiarella, Carl; Flaschel, Peter; … - 2010
In the last months, the world's economies were confronted with the largest economic recession since the Great Depression. The occurrence of a worldwide financial market meltdown as a consequence originally stemming from of the crisis in the US subprime housing sector was only prevented by...
Persistent link: https://www.econbiz.de/10003985522
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Risk-Taking, Capital Allocation and Optimal Monetary Policy
David, Joel Michael; Zeke, David - 2021
We study the role of firm heterogeneity in affecting business cycle dynamics and optimal stabilization policy. Firms differ in their degree of cyclicality, and hence, exposure to aggregate risk, leading to firm-specific risk premia that influence resource allocations. The heterogeneous firm...
Persistent link: https://www.econbiz.de/10013251194
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Optimal Monetary Noise in an Economy with Bayesian Consumers and Risk-Averse Investors
Teng, Jimmy - 2013
Autonomous demand shock affects consumption spending. Variation in consumption spending contributes to the volatility …
Persistent link: https://www.econbiz.de/10014158665