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Bad Luck, Bad Policy, and Learning? A Markov-Switching Approach to Understanding Postwar U.S. Macroeconomic Dynamics

Best, Gabriela - 2019

In this paper we analyze changes in the Federal Reserve behavior and objectives since the1960s justified by potentially evolving beliefs—through a real-time learning process—aboutthe structure of the economy and shifts in policymakers' preferences in the late 1970s. In addition, we allow for...

Persistent link: https://www.econbiz.de/10012903175

The output gap, the labor wedge, and the dynamic behavior of hours

Sala, Luca; Söderström, Ulf; Trigari, Antonella - 2010

We use a standard quantitative business cycle model with nominal price and wage rigidities to estimate two measures of economic ineffciency in recent U.S. data: the output gap - the gap between the actual and effcient levels of output - and the labor wedge - the wedge between households'...

Persistent link: https://www.econbiz.de/10008696839

Multivariate Filter Estimation of Potential Output for the United States : An Extension with Labor Market Hysteresis

Alichi, Ali - 2019

) to incorporate labor market hysteresis. This extension captures the idea that long and deep recessions (expansions) cause … financial crisis, compared to estimates without hysteresis. The smaller output gaps partly explain the absence of persistent …, hysteresis is expected to result in a structural improvement in growth and employment …

Persistent link: https://www.econbiz.de/10012889155

Monetary policy regimes and the volatility of long-term interest rates

Queijo von Heideken, Virginia (contributor) - 2008

This paper addresses two important questions that have, so far, been studied separately in the literature. First, the paper aims at explaining the high volatility of long-term interest rates observed in the data, which is hard to replicate using standard macro models. Building a small-scale...

Persistent link: https://www.econbiz.de/10003651439

Lessons from the Swedish Experience with Negative Central Bank Rates

Andersson, Fredrik N. G.; Jonung, Lars - 2020

Negative interest rates were once seen as impossible outside the realm of economic theory. However, several central banks have recently adopted negative policy rates. The Federal Reserve is coming under increasing pressure to follow suit in the wake of the coronavirus crisis. This paper...

Persistent link: https://www.econbiz.de/10013208878

Monetary cycles, financial cycles, and the business cycle

Adrian, Tobias; Estrella, Arturo; Shin, Hyun Song - 2010

One of the most robust stylized facts in macroeconomics is the forecasting power of the term spread for future real activity. The economic rationale for this forecasting power usually appeals to expectations of future interest rates, which affect the slope of the term structure. In this paper,...

Persistent link: https://www.econbiz.de/10003948217

The central-bank balance sheet as an instrument of monetary policy

Cúrdia, Vasco; Woodford, Michael - 2010

While many analyses of monetary policy consider only a target for a short-term nominal interest rate, other dimensions of policy have recently been of greater importance: changes in the supply of bank reserves, changes in the assets acquired by central banks, and changes in the interest rate...

Persistent link: https://www.econbiz.de/10008657197

What are the macroeconomic effects of asset purchases?

Weale, Martin; Wieladek, Tomasz - 2014

We examine the impact of large-scale asset purchases of government bonds on real GDP and the CPI in the United Kingdom and the United States with a Bayesian VAR, estimated on monthly data from 2009 M3 to 2013 M5. We identify an asset purchase shock with sign and zero restrictions. In contrast to...

Persistent link: https://www.econbiz.de/10010403096

Impact of Firm Characteristics and Monetary Policy Environment on Firms' Profitability Ratios and Price Multiples : Evidence from U.S. Industrial Firms

Banerjee, Gaurango - 2017

In this study, U.S. manufacturing firms' profitability measures including profit margins and returns on equity are examined over the 1971-2005 period. We find strong support for the “insulation hypothesis” as our results show that the profitability ratios and the valuation multiples of U.S....

Persistent link: https://www.econbiz.de/10012958037

Why US Monetary Policy Has Not Been Working

Grubel, Herbert - 2014

After the onset of the Great Recession in 2008 the Federal Reserve engaged in very expansionary monetary policy, which resulted in near zero interest rates on short-term securities. This policy, together with record fiscal deficits, failed to restore full employment as historic experiences would...

Persistent link: https://www.econbiz.de/10013048914

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