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Monetary commitment and the level of public debt
Gnocchi, Stefano; Lambertini, Luisa - 2016
We analyze the interaction between committed monetary policy and discretionary fiscal policy in a model with public debt, endogenous government expenditures, distortive taxation and nominal rigidities. Fiscal decisions lack commitment but are Markovperfect. Monetary commitment to an interest...
Persistent link: https://www.econbiz.de/10011431600
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The power of helicopter money revisited : a new Keynesian perspective
Carter, Thomas J.; Mendes, Rhys R. - 2020
We analyze money financing of fiscal transfers (helicopter money) in two simple New Keynesian models: a "textbook" model in which all money is non-interest-bearing (e.g., all money is currency), and a more realistic model with interest-bearing reserves. In the textbook model with only...
Persistent link: https://www.econbiz.de/10012159954
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Downward nominal wage rigidity meets the zero lower bound
Amano, Robert A.; Gnocchi, Stefano - 2017
We add downward nominal wage rigidity to a standard New Keynesian model with sticky prices and wages, where the zero lower bound on nominal interest rates is allowed to bind. We find that wage rigidity not only reduces the frequency of zero bound episodes but also mitigates the severity of...
Persistent link: https://www.econbiz.de/10011637421
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Limited commitment, endogenous credibility and the challenges of price-level targeting
Cateau, Gino; Shukayev, Malik - 2018
central bank with such discretion undermines the credibility of the price-level target and weakens its effectiveness to … stabilize the economy through expectations. The endogenous nature of credibility also brings novel results relative to models … with exogenous timing of target resets. A much higher degree of credibility is needed to realize the stabilization benefits …
Persistent link: https://www.econbiz.de/10011946949
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Gazing at r-star : a hysteresis perspective
Beaudry, Paul; Kartashova, Katya; Meh, Césaire Assah - 2023 - Last updated: January 12, 2023
Many explanations for the decline in real interest rates over the last 30 years point to the role that population aging or rising income inequality plays in increasing the long-run aggregate demand for assets. Notwithstanding the importance of such factors, the starting point of this paper is to...
Persistent link: https://www.econbiz.de/10013482643
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Could a higher inflation target enhance macroeconomic stability?
Dorich, José; Labelle, Nicholas; Lepetyuk, Vadym; … - 2018
Recent international experience with the effective lower bound on nominal interest rates has rekindled interest in the benefits of inflation targets above 2 per cent. We evaluate whether an increase in the inflation target to 3 or 4 per cent could improve macroeconomic stability in the Canadian...
Persistent link: https://www.econbiz.de/10011814250
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Short-time work and precautionary savings
Dengler, Thomas; Gehrke, Britta - 2021
In the Covid-19 crisis, most OECD countries use short-time work schemes (subsidized working time reductions) to preserve employment relationships. This paper studies whether short-time work can save jobs through stabilizing aggregate demand in recessions. We build a New Keynesian model with...
Persistent link: https://www.econbiz.de/10012517675
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Short-time work and precautionary savings
Dengler, Thomas; Gehrke, Britta - 2022
In the Covid-19 crisis, most OECD countries have used short-time work (subsidized working time reductions) to preserve employment relationships. This paper studies whether short-time work can save jobs through stabilizing aggregate demand in recessions. First, we show that the consumption risk...
Persistent link: https://www.econbiz.de/10013332143
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Housework and fiscal expansions
Gnocchi, Stefano; Hauser, Daniela; Pappa, Euē - 2014
We build an otherwise-standard business cycle model with housework, calibrated consistently with data on time use, in order to discipline consumption-hours complementarity and relate its strength to the size of fiscal multipliers. We show that if substitutability between home and market goods is...
Persistent link: https://www.econbiz.de/10010386697
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A New Approach for the General Equilibrium Analysis. Increase of the Production and Employment with Monetary and Fiscal Boosts
Nomidis, Dimitrios - 2014
The purpose of this paper is to present an approach with regard to the dynamic process of the general equilibrium during the business cycle fluctuations following monetary and fiscal interventions, which, I think, could contribute to bridging the differences between the different schools of...
Persistent link: https://www.econbiz.de/10013053400