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The nonlinear case against leaning against the wind

Boyarchenko, Nina; Crump, Richard K.; Dogra, Keshav; … - 2024

We re-examine the relationship between monetary policy and financial stability in a setting that allows for nonlinear, time-varying relationships between monetary policy, financial stability, and macroeconomic outcomes. Using novel machine-learning techniques, we estimate a flexible "nonlinear...

Persistent link: https://www.econbiz.de/10014581901

Network structures and heterogeneity in policy preferences at the FOMC

Bhattacharjee, Arnab; Holly, Sean; Wasseja, Mustapha - 2024

Transcripts from the US Federal Open Markets Committee provide, albeit with a lag, valuable information on the monetary policymaking process at the Federal Reserve Bank. We use the data compiled by Chappell et al. (2005b) on preferred interest rates (not votes) of individual FOMC members....

Persistent link: https://www.econbiz.de/10015066218

Central bank digital currency and transmission of monetary policy

Bhattarai, Saroj; Davoodalhosseini, Seyed Mohammadreza; … - 2024

bank deposits are backed by loans and central bank reserves. We find that the effects of a canonical monetary policy shock …, a shock to the Taylor rule that governs interest on central bank reserves, is magnified with the introduction of a fixed …-interest-rate CBDC. More generally, whether CBDC magnifies or abates the response of the economy depends on the type of shock (e …

Persistent link: https://www.econbiz.de/10015067345

Decision synthesis in monetary policy

Chernis, Tony; Koop, Gary; Tallman, Emily; West, Mike - 2024

The macroeconomy is a complicated dynamic system with significant uncertainties that make modelling difficult. Consequently, decision-makers consider multiple models that provide different predictions and policy recommendations and then synthesize that information into a policy decision. We use...

Persistent link: https://www.econbiz.de/10015067353