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Supermultiplier models, demand stagnation, and monetary policy : inevitable march to the lower bound for interest rates?

Fazzari, Steven M. - 2024

This article integrates monetary policy into a very simple dynamic supermultiplier model with an accommodating supply side. Results show that monetary policy guided by a conventional Taylor rule may stabilize an economy around the steady-state path of demand-led growth following temporary demand...

Persistent link: https://www.econbiz.de/10014529506

Fed QE and bank lending behaviour: A heterogeneity analysis of asset purchases

Grimaldi, Marianna; Kapoor, Supriya - 2023

Though unconventional monetary policy is still new, already there is a conventional wisdom that the impact of monetary policy is related to the composition of the asset mix. This turns out to be incomplete and potentially misleading. In this paper, we find more complex effects on bank lending...

Persistent link: https://www.econbiz.de/10014563895

Greenflation?

Olovsson, Conny; Vestin, David - 2023

What are the real and nominal implications of a green transition to a state with sustainable energy production, and how should monetary policy react during such transition? Using a New-Keynesian model with an energy and a goods sector, we show that a green transition requires the relative price...

Persistent link: https://www.econbiz.de/10014563899

Estimating deposit interest rate pass-through in central and Eastern European countries using wavelet transform and error correction model

Hajnal, Gábor; Hosszú, Zsuzsanna; Ozoróczy, Ákos Attila - 2024

Our study deals with interest rate pass-through for household and corporate deposits in the Central and Eastern European (CEE) region, focusing on the tightening cycle starting in the middle of 2021. This period is of particular interest for interest rate pass-through, as the sharp hikes by...

Persistent link: https://www.econbiz.de/10014563953

Quantitative easing, bond risk premia and the exchange rate in a small open economy

Christensen, Jens H. E.; Zhang, Xin - 2024

We assess the impact of large-scale asset purchases, commonly known as quantitative easing (QE), conducted by Sveriges Riksbank and the European Central Bank (ECB) on bond risk premia in the Swedish government bond market. Using a novel arbitrage-free dynamic term structure model of nominal and...

Persistent link: https://www.econbiz.de/10014563955

Inflation preferences

Dietrich, Alexander M.; Afrouzi, Hassan; Myrseth, … - 2024

We document novel survey-based facts about preferred long-run inflation rates among US consumers. Consumers on average prefer a 0.20% annual inflation rate, well below the Federal Reserve's 2% target. Inflation preferences not only correlate with demographic and socioeconomic characteristics,...

Persistent link: https://www.econbiz.de/10014563962

An exchange rate policy rule

Parrado, Eric - 2023

This paper introduces a novel monetary policy framework where the exchange rate becomes the central instrument. Using Singapore as a case study, it explores the Monetary Authority's adoption of the exchange rate as the primary tool since 1981, diverging from conventional approaches centered on...

Persistent link: https://www.econbiz.de/10014563972

Monetary policy and the redistribution channel in the euro area

Pekanov, Atanas - 2024

channels of monetary policy in the euro area. When households have heterogeneous MPCs and balance sheets, three … obtain a representative euro area dataset with detailed information on household balance sheets and consumption. I use a … the euro area the three redistribution channels enhance monetary policy - the effects of one time expansionary monetary …

Persistent link: https://www.econbiz.de/10014563982

The neutral interest rate: Past, present and future. A thematic review

Cacciatore, Matteo; Feunou, Bruno; Ozhan, G. Kemal - 2024

The decline in safe real interest rates over the past three decades has reignited discussions on the neutral real interest rate, known as R*. We review insights from the literature on R*, addressing its determinants and estimation methods, as well as the factors influencing its decline and its...

Persistent link: https://www.econbiz.de/10014564036

Optimal monetary policy with r* < 0

Billi, Roberto M.; Galí, Jordi; Nakov, Anton - 2024

We study the optimal monetary policy problem in a New Keynesian economy with a zero lower bound (ZLB) on the nominal interest rate, when the steady state natural rate (r*) becomes permanently negative. We show that the optimal policy aims to approach gradually a new steady state with positive...

Persistent link: https://www.econbiz.de/10014564038