Showing 1 - 10 of 773,485
determinacy of rational expectations equilibria. We use a strongly-separable utility function to model short-term bonds providing … model. In this way, we study equilibrium determinacy properties within a context embedding the full information derived from … of monetary policy rule. Achieving solution determinacy requires to constraint policy coefficients to lie within bounds …
Persistent link: https://www.econbiz.de/10011731614
When the government issues long-term bonds, the optimal time-consistent fiscal and monetary policy is to consolidate debt in a liquidity trap by increasing taxes and by taming public spending. This prescription is at odds with large deficit-spending undertaken in the US during previous liquidity...
Persistent link: https://www.econbiz.de/10013278929
Equilibrium bond-pricing models rely on inflation being bad news for future growth to generate upward-sloping nominal yield curves. We develop a model that can generate upward-sloping nominal and real yield curves by instead using ambiguity about inflation and growth. Ambiguity can help resolve...
Persistent link: https://www.econbiz.de/10011864574
markets for the determinacy of rational expectations equilibria. We use a strongly-separable utility function to model 'liquid … this context, the inflation targeting parameter should be higher than one for determinacy of rational expectations …. Achieving solution determinacy requires constraining these coefficients within bounds that depend on the structural parameters …
Persistent link: https://www.econbiz.de/10009147592
markets for the determinacy of rational expectations equilibria. We use a strongly-separable utility function to model ‘liquid … this context, the inflation targeting parameter should be higher than one for determinacy of rational expectations …. Achieving solution determinacy requires constraining these coefficients within bounds that depend on the structural parameters …
Persistent link: https://www.econbiz.de/10009142662
This paper proposes an equilibrium theory of nominal exchange rates, which offers a new perspective on various issues … features of this theory are that the nominal exchange rate is determined in international financial markets, that the risk … from the nominal exchange rate. In terms of policy, this novel theory implies that a country with an exchange rate peg and …
Persistent link: https://www.econbiz.de/10012619299
This paper provides a study of bond yield differentials among EU government bonds issued between 1993 and 2005 on the basis of a unique dataset of issue spreads in the US and DM (Euro) bond market. Interest differentials between bonds issued by EU countries and Germany or the USA contain risk...
Persistent link: https://www.econbiz.de/10010365887
This paper develops a tractable model of a monetary union with a sound fiscal governance structure and shows how in such environment the design of monetary policy above and at the lower bound constraint on short-term interest rates can be linked to well-known findings from the literature dealing...
Persistent link: https://www.econbiz.de/10011856536
A central equation for the fiscal theory of the price level (FTPL) is the government budget constraint (or "government …
Persistent link: https://www.econbiz.de/10012942155
This paper develops a tractable model of a monetary union with a sound fiscal governance structure and shows how in such environment the design of monetary policy above and at the lower bound constraint on short-term interest rates can be linked to well-known findings from the literature dealing...
Persistent link: https://www.econbiz.de/10012917169