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Inflation expectation uncertainty in a New Keynesian framework
Fuest, Angela; Schmidt, Torsten - 2020
, expectation uncertainty may undermine monetary policy’s ability to stabilise the economy. This study examines the effects of … inflation expectation uncertainty on inflation, inflation expectations and the output gap by means of a structural VAR with … stochastic volatility in mean. Inflation expectation uncertainty negatively affects the inflation rate and the output gap …
Persistent link: https://www.econbiz.de/10012308599
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The hockey stick Phillips curve and the effective lower bound
Böhl, Gregor; Lieberknecht, Philipp - 2021
We show that if business cycles are driven by financial shocks, the interplay between the effective lower bound (ELB) and the costs of external financing can generate an additional supply-side channel, which causes a disconnect between inflation and output. In normal times, factor costs dominate...
Persistent link: https://www.econbiz.de/10012792813
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Unraveling the impact of higher uncertainty on profits and inflation
Kara, Engin; Pirzada, Ahmed - 2023
This paper aims to explore the impact of rising uncertainty on prices using micro-data on prices and multi-sector new … Keynesian models. We identify diverse price responses to increasing macroeconomic uncertainty: goods with relatively flexible … prices experience a decline due to lower demand caused by the rising uncertainty, while those with sticky prices experience …
Persistent link: https://www.econbiz.de/10014320533
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The hockey stick Phillips curve and the zero lower bound
Böhl, Gregor; Lieberknecht, Philipp - 2021
The recently observed disconnect between inflation and economic activity can be explained by the interplay between the zero lower bound (ZLB) and the costs of external financing. In normal times, credit spreads and the nominal interest rate balance out; factor costs dominate firms' marginal...
Persistent link: https://www.econbiz.de/10012432969
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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
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Monetary Policy Regime Switches and Macroeconomic Dynamics
Foerster, Andrew T. - 2014
This paper investigates how different monetary policy regime switching types impact macroeconomic dynamics. Policy switches that either affect the inflation target or the response to inflation deviations from target lead to different determinacy regions and different output, inflation, and...
Persistent link: https://www.econbiz.de/10013063307
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Learning monetary policy strategies at the effective lower bound with sudden surprises
Krane, Spencer David; Melosi, Leonardo; Rottner, Matthias - 2023
from its new strategy, but this decision comes at the cost of higher near-term inflation and greater uncertainty about …
Persistent link: https://www.econbiz.de/10014330977
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Firms' expectations and price-setting : evidence from micro data
Boneva, Lena; Cloyne, James; Weale, Martin; Wieladek, Tomasz - 2016
In many forward-looking macroeconomic models, such as the New Keynesian model, firms' expectations about the future play a key role in determining outcomes today. We examine this hypothesis using a novel panel dataset on firms actual and expected price changes collected by the Confederation of...
Persistent link: https://www.econbiz.de/10011523616
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Inflation targeting, credibility and non-linear Taylor rules
Neuenkirch, Matthias; Tillmann, Peter - 2012
In this paper we systematically evaluate how central banks respond to inflation deviations from target. We present a stylized New Keynesian model in which agents' inflation expectations are sensitive to inflation deviations from target. To (re-)establish credibility, optimal monetary policy...
Persistent link: https://www.econbiz.de/10009564263
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Inflation Dynamics : Expectations, Structural Breaks and Global Factors
Siklos, Pierre L. - 2020
There is no consensus over the importance of “global forces” on inflation. This study explores the role of structural breaks in the inflation process, and their timing, whether it is common across countries, and the extent to which ‘global forces' are relevant. Three conclusions stand out....
Persistent link: https://www.econbiz.de/10012833362