The paper formulates the modeling of unconventional monetary policy and critically evaluates its effectiveness to address the Global Financial Crisis. We begin with certain principles guiding general scientific modeling and focus on Milton Friedman's 1968 Presidential Address that delineates the...

Several empirical studies have shown the inadequacy of the standard Brownian motion (sBm) as a model of asset returns. To correct for this evidence some authors have conjectured that asset returns may be independently and identically Pareto-Lévy stable (PLs) distributed, whereas others have...

In this paper we consider two new independent variables as inputs to the Taylor Rule. These are the equity and housing momentum variables and are introduced to investigate the potential usefulness of these two variables in guiding the Fed to lean against potential bubbles. Such effectiveness...

This paper considers the directional predictability of daily returns for both gold and silver. These two metals have had a long history behaving sometimes as complements and other times as substitutes. We use daily data from June of 2008 through February of 2015. The last two years were removed...

The Financial Crisis of 2007-09 caused the U.S. economy to experience a relatively long recession from December 2007 to June 2009. Both the U.S. government and the Federal Reserve undertook expansive fiscal and monetary policies to minimize both the severity and length of the recession. Most...

The behavior of gold as an investment asset has been researched extensively. For the very long run, that is several decades, gold does not outperform equities. However, for shorter periods, gold responds to fears of inflation, stock market corrections, currency crises and financial instabilities...

After the bankruptcy of Lehman Brothers in September of 2008 and the financial panic that ensued, the Federal Reserve moved rapidly to reduce the federal funds rate to .25%. It was quickly judged that additional measures were needed to stabilize the U.S. economy. Beginning in December 2008, the...

In 1994 the Federal Reserve System moved to a more transparent reporting of monetary policy. In this paper we first discuss the evolution of Federal Reserve transparency in U.S. and second we test its effectiveness. We assess the empirical impact of monetary policy transparency on the...

Among the various shocks that may cause financial instabilities, the bursting of asset bubbles has received most attention during the last decade. This paper discusses the risk management of financial instabilities caused by asset price crashes and evaluates the appropriate role of central...

What is the influence of stock market valuations on monetary policy? This paper uses a forward looking Taylor rule model to examine empirically if monetary policy, since the October 19, 1987 stock market crash, has been influenced by the valuation of the stock market as measured by the Samp;P...