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The New Keynesian Phillips Curve of Rational Expectations : A Serial Correlation Extension

Zhang, Chengsi; Clovis, Joel - 2010

an IV test for serial correlation in the GMM context, we find that the error term in the stylized NKPC model is …This paper evaluates the empirical validity of the New Keynesian Phillips Curve (NKPC) model of rational expectations … inflation are needed in the hybrid specification of the NKPC in order to rule out serial correlation in the Euler equation …

Persistent link: https://www.econbiz.de/10014194150

Shocks versus structure : explaining differences in exchange rate pass-through across countries and time

Forbes, Kristin; Hjortsoe, Ida; Nenova, Tsvetelina - 2017

We show that exchange rate pass-through to consumer prices varies not only across countries, but also over time. Previous literature has highlighted the role of an economy's "structure" - such as its inflation volatility, inflation rate, use of foreign currency invoicing, and openness - in...

Persistent link: https://www.econbiz.de/10011671018

Currency crises and monetary policy in economies with partial dollarization of liabilities

Proaño Acosta, Christian; Flaschel, Peter; Semmler, Willi - 2006

The right response to a speculative attack on the domestic currency by monetary authorities in a country with liabilities in US dollars has been a matter of hot debate among academics and policy makers especially after the East Asian Crisis. Using a modified version of the currency crisis model...

Persistent link: https://www.econbiz.de/10003744532

Managing beliefs about monetary policy under discretion

Mertens, Elmar - 2009

Monetary policy is most effective when public beliefs about future policies are actively managed. This is the appeal of policy rules and commitment strategies, typically absent under discretion. But when a policymaker has some private information - as is the case in reality - belief management...

Persistent link: https://www.econbiz.de/10003882302

Commodities and monetary policy : implications for inflation and price level targeting

Coletti, Donald; Lalonde, René; Masson, Paul R.; Muir, Dirk - 2012

We examine the relative ability of simple inflation targeting (IT) and price level targeting (PLT) monetary policy rules to minimize both inflation variability and business cycle fluctuations in Canada for shocks that have important consequences for global commodity prices. We find that...

Persistent link: https://www.econbiz.de/10009546871

Exchange rate and price dynamics at the zero lower bound : conference paper

Bäurle, Gregor; Kaufmann, Daniel - 2013

In this paper, we analyse nominal exchange rate and price dynamics after risk shocks with short-term interest rates constrained by the zero lower bound (ZLB). We show with a stylized theoretical model that temporary risk shocks may lead to permanent shifts of the exchange rate and the price...

Persistent link: https://www.econbiz.de/10010340556

Managing Beliefs About Monetary Policy Under Discretion

Mertens, Elmar - 2011

In models of monetary policy, discretionary policymaking often lacks the ability to manage public beliefs, which explains the theoretical appeal of policy rules and commitment strategies. But as shown in this paper, when a policymaker possesses private information, belief management becomes an...

Persistent link: https://www.econbiz.de/10013128709

Tails of Inflation Forecasts and Tales of Monetary Policy

Andrade, Philippe - 2012

We introduce a new measure called Inflation-at-Risk (I@R) associated with (left and right) tail inflation risk. We estimate I@R using survey-based density forecasts. We show that it contains information not covered by usual inflation risk indicators which focus on inflation uncertainty and do...

Persistent link: https://www.econbiz.de/10013096924

CBDCs and NIRP : New Tools for Monetary Policy

Berriel, Tiago - 2019

The last decade has witnessed two groundbreaking developments in monetary economics: The growth in digital private currencies and negative interest rate policies (NIRP), leaving the zero lower bound no longer binding. These developments have introduced two parallel discussions surrounding the...

Persistent link: https://www.econbiz.de/10012889308

A Monetary Base Analysis and Control Model

Gursel, Haluk Ferden - 2019

This report is one of the first studies discussing monetary base analysis and control model, a concept even today is alive and more developed by, for example, by IMF to use its analysis. The study presents monetary base approach to control of money flows and the links between monetary base,...

Persistent link: https://www.econbiz.de/10012892419

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