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Elevated inflation can threaten the credibility of central banks and increase the risk that inflation expectations do …-varying propagation of inflationary shocks that improves forecasting performance of inflation and wage growth. Central bank credibility is … endogenous in our model and depends on several notions of the learning mechanism. Weaker credibility and a higher risk of …
Persistent link: https://www.econbiz.de/10014558998
This paper examines the value of direct communication to households about inflation and the uncertainty around inflation statistics. All types of information about inflation are effective at immediately managing inflation expectations, with information about outlooks being more effective and...
Persistent link: https://www.econbiz.de/10014457623
This paper examines the value of direct communication to households about inflation and the uncertainty around inflation statistics. All types of information about inflation are effective at immediately managing inflation expectations, with information about outlooks being more effective and...
Persistent link: https://www.econbiz.de/10014544477
We use narrative evidence along with a novel database of real-time data and forecasts from the Bank of Canada's staff economic projections from 1974 to 2015 to construct a new measure of monetary policy shocks and estimate the effects of monetary policy in Canada. We show that it is crucial to...
Persistent link: https://www.econbiz.de/10011777945
This paper reconsiders the degree to which macroeconomic stabilization is possible when the zero lower bound is a relevant constraint on the effectiveness of conventional monetary policy, under an assumption of bounded rationality. In particular, we reconsider the potential role of...
Persistent link: https://www.econbiz.de/10012705296
This paper reconsiders the degree to which macroeconomic stabilization is possible when the zero lower bound is a relevant constraint on the effectiveness of conventional monetary policy, under an assumption of bounded rationality. In particular, we reconsider the potential role of...
Persistent link: https://www.econbiz.de/10012650211
We use narrative evidence along with a novel database of real-time data and forecasts from the Bank of Canada's staff economic projections from 1974 to 2015 to construct a new measure of monetary policy shocks and estimate the effects of monetary policy in Canada. We show that it is crucial to...
Persistent link: https://www.econbiz.de/10012014447
We propose a macroeconomic model with a nonlinear Phillips curve that has a flat slope when inflationary pressures are subdued and steepens when inflationary pressures are elevated. The nonlinear Phillips curve in our model arises due to a quasi-kinked demand schedule for goods produced by...
Persistent link: https://www.econbiz.de/10014544443
We develop a heterogeneous-agent New Keynesian model featuring a frictional labor market with on-the-job search to quantitatively study the positive and normative implications of employer-to-employer (EE) transitions for inflation. We find that EE dynamics played an important role in shaping the...
Persistent link: https://www.econbiz.de/10014544535
This paper provides direct evidence of the importance of firm attention to macro-economic dynamics. We construct a text-based measure of firm attention to macro-economic news and document firm attention that is polarized and countercyclical. Differences in attention lead to asymmetric responses...
Persistent link: https://www.econbiz.de/10013272206