Similar Search Results

Scarce, abundant, or ample? A time-varying model of the reserve demand curve

Afonso, Gara; Giannone, Domenico; La Spada, Gabriele; … - 2022

Does the federal funds rate respond to shocks when aggregate reserves are in the trillions of dollars? Has banks' demand for reserves moved over time? We provide a structural time-varying estimate of the slope of the reserve demand curve over 2010-21. We estimate a time-varying vector...

Persistent link: https://www.econbiz.de/10013432949

Banks' balance-sheet costs, monetary policy, and the ON RRP

Afonso, Gara; Cipriani, Marco; La Spada, Gabriele - 2022

In June 2022, the Federal Reserve started reducing the size of its balance sheet, which had expanded to just under $9 trillion in response to the COVID-19 pandemic. However, whereas banks' reserves at the Federal Reserve have decreased, the investment of money market funds (MMFs) at the Federal...

Persistent link: https://www.econbiz.de/10014302763

Fed transparency and policy expectation errors: A text analysis approach

Fischer, Eric; McCaughrin, Rebecca; Prazad, Saketh; … - 2023

This paper seeks to estimate the extent to which market-implied policy expectations could be improved with further information disclosure from the FOMC. Using text analysis methods based on large language models, we show that if FOMC meeting materials with five-year lagged release dates-like...

Persistent link: https://www.econbiz.de/10014480439

Congestion in onboarding workers and sticky R&D

Bloesch, Justin; Weber, Jacob P. - 2023

R&D investment spending exhibits a delayed and hump-shaped response to shocks. We show in a simple partial equilibrium model that rapidly adjusting R&D investment is costly if the probability of converting new hires into productive R&D workers ("onboarding") is decreasing in the number of new...

Persistent link: https://www.econbiz.de/10014480663

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