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Inflation targeting and liquidity traps under endogenous credibility

Hommes, Cars H.; Lustenhouwer, Joep - 2019

Policy implications are derived for an inflation-targeting central bank, whose credibility is endogenous and depends on … rational expectations. We find that the region of allowed policy parameters is strictly larger than under rational expectations … occur, depending on the credibility of the central bank. Deflationary spirals can be prevented with a high inflation target …

Persistent link: https://www.econbiz.de/10011978053

Sacrifice Ratios and Monetary Policy Credibility : Do Smaller Budget Deficits, Inflation-Indexed Debt, and Inflation Targets Lower Disinflation Costs?

Durham, J. Benson - 2002

does not satisfactorily examine key fiscal and monetary policy practices that arguably affect policymaking credibility … addenda, the results generally suggest that credibility proxies are largely sensitive to research design. However, some data …

Persistent link: https://www.econbiz.de/10014122385

Some observations in the high-frequency versions of a standard new-keynesian model

Franke, Reiner; Sacht, Stephen - 2010

In a small-scale New-Keynesian model with a hybrid Phillips curve and IS equation, the paper is concerned with an arbitrary frequency of the agents’ synchronized decision making. It investigates the validity of a fundamental methodological precept according to which no substantive prediction...

Persistent link: https://www.econbiz.de/10003930231

Micro and macro policies in the Keynes+Schumpeter evolutionary models

Dosi, Giovanni; Napoletano, Mauro; Roventini, Andrea; … - 2014

This paper presents the family of the Keynes+Schumpeter (K+S, cf. Dosi et al, 2010, 2013, 2014) evolutionary agent-based models, which study the effects of a rich ensemble of innovation, industrial dynamics and macroeconomic policies on the long-term growth and short-run fluctuations of the...

Persistent link: https://www.econbiz.de/10010430728

The Analytics of the New Keynesian 3-Equation Model

Poutineau, Jean‐Christophe - 2015

This paper aims at providing a self contained presentation of the ideas and solution procedure of New Keynesian Macroeconomics models. Using the benchmark “3 equation model”, we introduce the reader to an intuitive, static version of the model before incorporating more technical aspects...

Persistent link: https://www.econbiz.de/10013014763

Early Warning Indicators and Macro-Prudential Policies : A Credit Network Agent Based Model

Catullo, Ermanno - 2017

Credit network configurations play a crucial role in determining the vulnerability of the economic system. Following the network-based financial accelerator approach, we constructed an agent based model reproducing an artificial credit network that evolves endogenously according to the leverage...

Persistent link: https://www.econbiz.de/10012954575

Micro and Macro Policies in the Keynes Schumpeter Evolutionary Models

Dosi, Giovanni - 2014

This paper presents the family of the Keynes Schumpeter (K S, cf. Dosi et al, 2010, 2013, 2014) evolutionary agent-based models, which study the effects of a rich ensemble of innovation, industrial dynamics and macroeconomic policies on the long-term growth and short-run fluctuations of the...

Persistent link: https://www.econbiz.de/10013044166

Efficient VAR Discretization

Gordon, Grey - 2020

The standard approach to discretizing VARs uses tensor grids. However, when the VAR components exhibit significant unconditional correlations or when there are more than a few variables, this approach creates large inefficiencies because some discretized states will be visited with only...

Persistent link: https://www.econbiz.de/10014095058

The Empirical Performance of the Financial Accelerator Since 2008

Boehl, Gregor; Strobel, Felix - 2022

We use nonlinear Bayesian methods to evaluate the performance of financial frictions á la Bernanke et al. (1999) during and after the Global Financial Crisis. We find that, despite the attention received in the literature, including these frictions in the canonical medium-scale DSGE model does...

Persistent link: https://www.econbiz.de/10013405102

The rationality Bias

Hagenhoff, Tim; Lustenhouwer, Joep - 2019

We analyze differences in consumption and wealth that arise because of different degrees of rationality of households. In particular, we use a standard New Keynesian model and let a certain fraction of households be fully rational while the other fraction possesses less cognitive ability. We...

Persistent link: https://www.econbiz.de/10012286210