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Leeper, Eric M. - 2015

Dramatic fiscal developments in the wake of the 2008 financial crisis and global recession led researchers to recognize how little we know about fiscal policies and their impacts. This essay argues that fiscal analysis that aims to address pertinent issues and provide useful inputs to...

Persistent link: https://www.econbiz.de/10013010203

Reputation and Liquidity Traps

Nakata, Taisuke - 2014

Can the central bank credibly commit to keeping the nominal interest rate low for an extended period of time in the aftermath of a deep recession? By analyzing credible plans in a sticky-price economy with occasionally binding zero lower bound constraints, I find that the answer is yes if...

Persistent link: https://www.econbiz.de/10013050097

Optimal Government Spending at the Zero Lower Bound : A Non-Ricardian Analysis

Nakata, Taisuke - 2015

This paper analyzes the implications of distortionary taxation and debt financing for optimal government spending policy in a sticky-price economy where the nominal interest rate is subject to the zero lower bound constraint. Regardless of the type of tax available and the initial debt level,...

Persistent link: https://www.econbiz.de/10013020784

The Policy Mix in the US and EMU : Evidence from a SVAR Analysis

Afonso, António - 2018

the US and the Euro Area (EMU). Overall, our results show that these two cases are different from each other. First, while … in the case of the US there is evidence of Keynesian monetary policy, the same is not true in the case of the EMU. Second … of the EMU (expansionary fiscal consolidation), while it does not hold in the case of the US. Third, there is evidence …

Persistent link: https://www.econbiz.de/10012928380

Uncertainty at the Zero Lower Bound

Nakata, Taisuke - 2015

This paper examines how the presence of uncertainty alters allocations and prices when the nominal interest rate is constrained by the zero lower bound. I conduct the analysis using a standard New Keynesian model in which the nominal interest rate is determined according to a truncated Taylor...

Persistent link: https://www.econbiz.de/10013035763

Reinstating fiscal policy for normal times : public investment and public jobs programmes

Skidelsky, Robert Jacob Alexander; Gasperin, Simone - In: PSL quarterly review 74 (2021) 296, pp. 3-24

This paper upholds the classical Keynesian position that a laissez-faire market economy lacks a spontaneous tendency to full employment. Focusing on the UK case, it argues that monetary policy could not prevent the economic collapse of 2008-9 or achieve full recovery from the Great Recession...

Persistent link: https://www.econbiz.de/10013175036

Optimal Fiscal and Monetary Policy with Occasionally Binding Zero Bound Constraints

Nakata, Taisuke - 2013

This paper studies optimal government spending and monetary policy when the nominal interest rate is subject to the zero lower bound constraint in a stochastic New Keynesian economy. I find that the government chooses to increase its spending when at the zero lower bound by a substantially...

Persistent link: https://www.econbiz.de/10013078458

A promised value approach to optimal monetary policy

Hills, Timothy S.; Nakata, Taisuke; Sunakawa, Takeki - 2018 - This draft: August 2018

This paper characterizes optimal commitment policy in the New Keynesian model using a novel recursive formulation of the central bank's infinite horizon optimization problem. In our recursive formulation motivated by Kydland and Prescott (1980), promised inflation and output gap---as opposed to...

Persistent link: https://www.econbiz.de/10012016641

Optimal inflation target with expectations-driven liquidity traps

Coyle, Philip; Nakata, Taisuke - 2019 - This draft: April 2019

In expectations-driven liquidity traps, a higher inflation target is associated with lower inflation and consumption. As a result, introducing the possibility of expectations-driven liquidity traps to an otherwise standard model lowers the optimal inflation target. Using a calibrated New...

Persistent link: https://www.econbiz.de/10012181161

Credible forward guidance

Nakata, Taisuke; Sunakawa, Takeki - 2019 - This draft: April 2019

We analyze credible forward guidance policies in a sticky-price model with an effective lower bound (ELB) constraint on nominal interest rates by solving a series of optimal sustainable policy problems indexed by the duration of reputational loss. Lower-for-longer policies --- while effective in...

Persistent link: https://www.econbiz.de/10012181173