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Generalizing Determinacy under Monetary and Fiscal Policy Switches : The Case of the Zero Lower Bound

Cho, Seonghoon - 2020

In a fixed-regime setting, it is known since Leeper (1991) that both monetary dominance (mix of active monetary and passive fiscal policies) and fiscal dominance (mix of active fiscal and passive monetary policy) regimes yield a determinate unique equilibrium. This paper shows that in a...

Persistent link: https://www.econbiz.de/10012847919

Demand Shocks, Hysteresis and Monetary Policy

Sim, Jae - 2022

This paper builds a micro-founded general equilibrium model of hysteresis in which changing composition of firms with heterogeneous qualities in response to demand shocks alter the total factor productivity of the economy through a process of "creative destruction". Hysteresis fundamentally...

Persistent link: https://www.econbiz.de/10014238148

Forward-Looking Behavior and the Optimality of the Taylor Rule

Lansing, Kevin J.; Trehan, Bharat - 2001

inflation and the output gap in the central bank's interest rate rule. Specifically, we isolate the influence of forward … some assumptions about forward-looking behavior that are motivated by economic theory, we show that a plausible set of …

Persistent link: https://www.econbiz.de/10014134690

Endogenous Monetary Policy Regime Changes

Davig, Troy - 2013

This paper makes changes in monetary policy rules (or regimes) endogenous. Changes are triggered when certain endogenous variables cross specified thresholds. Rational expectations equilibria are examined in three models of threshold switching to illustrate that (i) expectations formation...

Persistent link: https://www.econbiz.de/10014055201

Endogenous Monetary Policy Regime Change

Davig, Troy; Leeper, Eric M. - 2013

Persistent link: https://www.econbiz.de/10014055631

Monetary Policy Rules and Oil Price Shocks

Kamps, Christophe; Pierdzioch, Christian - 2005

implications for monetary policy as the central bank has to decide which inflation rate to target. Our results demonstrate that …

Persistent link: https://www.econbiz.de/10014064009

The State-Dependent Effects of Monetary Policy : The Role of Real Rigidities

Kamalyan, Hayk - 2022

This paper studies the state-dependent effects of monetary policy shocks. It shows that a canonical sticky-price model with real rigidity in the form of firm-specific factors can generate substantial state-dependence in the effects of monetary policy shocks. Factor specificity introduces a...

Persistent link: https://www.econbiz.de/10014076822

Information Frictions, Monetary Policy, and the Paradox of Price Flexibility

Ou, Shengliang; Zhang, Donghai; Zhang, Renbin - 2020

cost of inflation in a sector increases in price flexibility, altering the optimal inflation target policy. A monetary … policy that stabilizes the optimal inflation index mitigates the paradox …

Persistent link: https://www.econbiz.de/10014091538

Monetary Policy and Central Bank Behaviour

Gartner, Manfred - 2003

political business cycles, the inflation-stabilisation dilemma is discussed along with proposed solutions in the form of central … bank independence and conservativeness, incentive contracts, and inflation targets. The final section turns to current …

Persistent link: https://www.econbiz.de/10014104034

The Role of Expectations in Economic Fluctuations and the Efficacy of Monetary Policy

Kurz, Mordecai; Jin, Hehui; Motolese, Maurizio - 2003

monetary policy. Since expectations affect demand, our theory shows economic fluctuations are mostly driven by varying demand … inflation volatility to zero. (iii) The statistical Phillips Curve changes substantially with policy instruments and activist … inflation hence the aggregate price level appears "sticky" with respect to money shocks. (v) Discretion in monetary policy adds …

Persistent link: https://www.econbiz.de/10014029667