This PDF is a selection from a published volume from... National Bureau of Economic Research
... effect of lowering longer-term interest rates by altering the market’s expec3. For example, Governor Toshihiko Fukui stated no June 1, 2003, that the idea behind the current policy commitment is “to achieve an easing effect by the Bank’s commitment to keep short-term rates at low levels well into the ...
... effect of lowering longer-term interest rates by altering the market’s expec3. For example, Governor Toshihiko Fukui stated no June 1, 2003, that the idea behind the current policy commitment is “to achieve an easing effect by the Bank’s commitment to keep short-term rates at low levels well into the ...
Aggregate demand policies and domestic economic stability
... • Personal income tax is a direct tax paid by individuals who earn incomes in the form of wages, salaries, rent, interest and dividends. For most people, income tax is deducted by firms from the pay packets of employees before they are paid (pay-as-you-go or PAYG). However, for self-employed individ ...
... • Personal income tax is a direct tax paid by individuals who earn incomes in the form of wages, salaries, rent, interest and dividends. For most people, income tax is deducted by firms from the pay packets of employees before they are paid (pay-as-you-go or PAYG). However, for self-employed individ ...
Zero lower bound: Is it a problem in the euro area?
... output gap, p * denotes the monetary policy-makers’ inflation target which determines the steady-state rate of inflation in the model and r * is the equilibrium real interest rate which is exogenous to the model like the supply side determining potential output. This rule incorporates policy respons ...
... output gap, p * denotes the monetary policy-makers’ inflation target which determines the steady-state rate of inflation in the model and r * is the equilibrium real interest rate which is exogenous to the model like the supply side determining potential output. This rule incorporates policy respons ...
Paper - Matthew Hoelle
... the paper can be found at www.matthew-hoelle.com/1/75/resources/document_690_1.pdf. ...
... the paper can be found at www.matthew-hoelle.com/1/75/resources/document_690_1.pdf. ...
This PDF is a selection from an out-of-print volume from... of Economic Research Volume Title: Monetary Policy Rules
... rate era of Bretton Woods and the modem flexible exchange rate era, including 7 business cycles, an inflation, a sharp disinflation, and the recent 15-year stretch of relatively low inflation and macroeconomic stability. The change in the policy rule over these periods has been dramatic. The type of ...
... rate era of Bretton Woods and the modem flexible exchange rate era, including 7 business cycles, an inflation, a sharp disinflation, and the recent 15-year stretch of relatively low inflation and macroeconomic stability. The change in the policy rule over these periods has been dramatic. The type of ...
The interest rate pass-through in the euro area during
... and their components. We exclude the period from mid-2007 to 2009 (global financial crisis) from our baseline analysis as it has been quite different from the sovereign debt crisis. While interruptions in money markets during the global financial crisis likely led to changes in the transmission from ...
... and their components. We exclude the period from mid-2007 to 2009 (global financial crisis) from our baseline analysis as it has been quite different from the sovereign debt crisis. While interruptions in money markets during the global financial crisis likely led to changes in the transmission from ...
2 The Case for Price Stability Abstract Marvin Goodfriend and Robert G. King*
... In our prior paper, we argued informally that the central bank should stabilize the price level for three reasons. First, markup constancy would make the real economy respond to shocks as if all prices were perfectly flexible. Second, markup constancy corresponds to tax smoothing in the public finan ...
... In our prior paper, we argued informally that the central bank should stabilize the price level for three reasons. First, markup constancy would make the real economy respond to shocks as if all prices were perfectly flexible. Second, markup constancy corresponds to tax smoothing in the public finan ...
-1- Draft: October 15, 2008 DOLLAR DOMINANCE, EURO
... eurosystem – is an artificial construct, lacking the clear lines of authority traditionally associated with the management of money by a single national government. Though the bloc does have a central monetary agency, the European Central Bank (ECB), there is neither a common regulatory regime nor a ...
... eurosystem – is an artificial construct, lacking the clear lines of authority traditionally associated with the management of money by a single national government. Though the bloc does have a central monetary agency, the European Central Bank (ECB), there is neither a common regulatory regime nor a ...
This PDF is a selection from an out-of-print volume from... of Economic Research Volume Title: Rational Expectations and Economic Policy
... stock or very short contracts-that would insulate them from the effects of unanticipated changes in the money stock. The answer is that such contingent arrangements are costly; the private sector is therefore willing I am grateful to David Modest for research assistance and to Olivier Blanchard, Rud ...
... stock or very short contracts-that would insulate them from the effects of unanticipated changes in the money stock. The answer is that such contingent arrangements are costly; the private sector is therefore willing I am grateful to David Modest for research assistance and to Olivier Blanchard, Rud ...
1 9 9 8 - 03, July The International Role of the Euro Agnès Bénassy
... However, it should be remembered that the finance G-7 never proved effective in co-ordinating fiscal, monetary and exchange rate policies. The difficulties listed above should not be over-stated: concomitant meetings could help to overcome the separation between the G-3 and the G-7, and internationa ...
... However, it should be remembered that the finance G-7 never proved effective in co-ordinating fiscal, monetary and exchange rate policies. The difficulties listed above should not be over-stated: concomitant meetings could help to overcome the separation between the G-3 and the G-7, and internationa ...
Optimal Monetary Policy
... instrument-rate path and current instrument-rate setting; all info that has no impact on forecast has no impact on instrument rate path and current setting More explicit optimal policy: Try to make explicit and more systematic what is already going on implicitly ...
... instrument-rate path and current instrument-rate setting; all info that has no impact on forecast has no impact on instrument rate path and current setting More explicit optimal policy: Try to make explicit and more systematic what is already going on implicitly ...
Monetary Policy Communication Under Inflation Targeting: Do Words Speak Louder Than Actions ?
... At the initial stages of the new regime, monetary policy lacked control over the longer end of the yield curve, because under high public debt and short maturities, the volatile risk premium manifested itself as excess variability in the exchange rates. Increased volatility in exchange rates coupled ...
... At the initial stages of the new regime, monetary policy lacked control over the longer end of the yield curve, because under high public debt and short maturities, the volatile risk premium manifested itself as excess variability in the exchange rates. Increased volatility in exchange rates coupled ...
Central Bank Communication and Expectations Stabilization
... beliefs of agents are consistent with monetary policy strategy. This promotes macroeconomic stability. These stabilization benefits can also be fully captured by a communication strategy that only conveys the set of endogenous variables upon which monetary policy decisions are conditioned, as propos ...
... beliefs of agents are consistent with monetary policy strategy. This promotes macroeconomic stability. These stabilization benefits can also be fully captured by a communication strategy that only conveys the set of endogenous variables upon which monetary policy decisions are conditioned, as propos ...
Draft: October 14, 2008 DOLLAR DOMINANCE, EURO ASPIRATIONS
... eurosystem – is an artificial construct, lacking the clear lines of authority traditionally associated with the management of money by a single national government. Though the bloc does have a central monetary agency, the European Central Bank (ECB), there is neither a common regulatory regime nor a ...
... eurosystem – is an artificial construct, lacking the clear lines of authority traditionally associated with the management of money by a single national government. Though the bloc does have a central monetary agency, the European Central Bank (ECB), there is neither a common regulatory regime nor a ...
Post-Crisis Slow Recovery and Monetary Policy
... GDP per capita, TFP (Solow residual), bank lending, and the CPI in‡ation rate. Note that in each panel of the …gure, the scale of years at the top is for Japan only, while that at the bottom is for the other three economies. In Panels (a) and (b), the pre-crisis trend grows at a rate that is average ...
... GDP per capita, TFP (Solow residual), bank lending, and the CPI in‡ation rate. Note that in each panel of the …gure, the scale of years at the top is for Japan only, while that at the bottom is for the other three economies. In Panels (a) and (b), the pre-crisis trend grows at a rate that is average ...
EVOLUTION AND RATIONALITY OF BUDGET INSTITUTIONS IN
... In one instance - the 1892 reforms - budgeting regulations were prompted more by the proximity of crisis and as a reaction to the inflationary pressures created by the monetary policy of the government than by a reformist animus. Most other nineteenth century budgetary reforms were motivated by the ...
... In one instance - the 1892 reforms - budgeting regulations were prompted more by the proximity of crisis and as a reaction to the inflationary pressures created by the monetary policy of the government than by a reformist animus. Most other nineteenth century budgetary reforms were motivated by the ...
is the price level determined by the needs of fiscal solvency?
... part of the definition of NR regimes; it is not an additional restriction imposed by our empirical analysis of such regimes. On to what is important: The really substantive assumption we have to make is that limsup cj exceeds an arbitrarily small positive constant c* – that is, cj is bounded away fr ...
... part of the definition of NR regimes; it is not an additional restriction imposed by our empirical analysis of such regimes. On to what is important: The really substantive assumption we have to make is that limsup cj exceeds an arbitrarily small positive constant c* – that is, cj is bounded away fr ...
No. 322 Fiscal Consolidation Under Imperfect Credibility
... as a useful reference point, we then move on to the benchmark case in which the consolidating economy is a small member of a currency union (henceforth CU), without the means to exert any meaningful in‡uence on currency union policy rates and on its nominal exchange rate. The latter case, we believe ...
... as a useful reference point, we then move on to the benchmark case in which the consolidating economy is a small member of a currency union (henceforth CU), without the means to exert any meaningful in‡uence on currency union policy rates and on its nominal exchange rate. The latter case, we believe ...
Monetary policy and uncertainty
... bias, the policy-maker injects a lot of variance into future inflation, and implies that (5) would result in a different policy response from (4).(1) Given that policy-makers are assumed in this particular model to be able to control inflation speedily and accurately, why would they not offset infla ...
... bias, the policy-maker injects a lot of variance into future inflation, and implies that (5) would result in a different policy response from (4).(1) Given that policy-makers are assumed in this particular model to be able to control inflation speedily and accurately, why would they not offset infla ...
NBER WORKING PAPER SERIES ON ACTIVIST MONETARY POLICY WITH RATIONAL EXPECTATIONS Stanley Fischer
... the leading theory of expectations in the same sense that utility theory (or its equivalents) is the leading theory of consumer behavior. We frequently use models in which behavioral functions are not explicitly derived from maximization, but are uneasy in doing so, and are reassured if it can be sh ...
... the leading theory of expectations in the same sense that utility theory (or its equivalents) is the leading theory of consumer behavior. We frequently use models in which behavioral functions are not explicitly derived from maximization, but are uneasy in doing so, and are reassured if it can be sh ...
Economics R. Glenn Hubbard, Anthony Patrick O`Brien, 2e.
... Growth rate of velocity − Growth rate of real output If the velocity is constant: Inflation rate = Growth rate of the money supply − Growth rate of real output In the long run, inflation results from the money supply growing at a faster rate than real GDP. Hyperinflation and how it comes. ...
... Growth rate of velocity − Growth rate of real output If the velocity is constant: Inflation rate = Growth rate of the money supply − Growth rate of real output In the long run, inflation results from the money supply growing at a faster rate than real GDP. Hyperinflation and how it comes. ...
Document
... policy instruments. The idea is that rational expectations may, in certain cases, enhance the power to control an economy over time. Hence, contrary to conventional wisdom, rational expectations may, but do not always, neutralize the policymaker’s action. Specifically, we consider the design of econ ...
... policy instruments. The idea is that rational expectations may, in certain cases, enhance the power to control an economy over time. Hence, contrary to conventional wisdom, rational expectations may, but do not always, neutralize the policymaker’s action. Specifically, we consider the design of econ ...
NBER WORKING PAPER SERIES Russell Cooper Hubert Kempf
... the gains to monetary union arise from eliminating barriers to transactions while the costs reflect the reduced effectiveness of stabilization policy once monetary policy is delegated to a single central bank.2 In his evaluation of the EMU, Feldstein [1997] perfectly exemplifies ...
... the gains to monetary union arise from eliminating barriers to transactions while the costs reflect the reduced effectiveness of stabilization policy once monetary policy is delegated to a single central bank.2 In his evaluation of the EMU, Feldstein [1997] perfectly exemplifies ...
Net debt supply shocks in the euro area and the - ECB
... the exception of Afonso and Martins (2010) who looked at the relationship between government debt and yields in Germany, albeit from a different perspective. This paper tries to fill this gap for the euro area and to draw implications for the impact of the ECB’s PSPP. The empirical approach we use ...
... the exception of Afonso and Martins (2010) who looked at the relationship between government debt and yields in Germany, albeit from a different perspective. This paper tries to fill this gap for the euro area and to draw implications for the impact of the ECB’s PSPP. The empirical approach we use ...
Seminar Paper No. 649 THE ROBUSTNESS AND EFFICIENCY OF
... Research on monetary policy rules has mushroomed since the early 1990s and is now being conducted at many universities, central banks, research institutes, and private financial firms. In a relatively short span of time, an enormous amount of information has been generated by this research effort. ...
... Research on monetary policy rules has mushroomed since the early 1990s and is now being conducted at many universities, central banks, research institutes, and private financial firms. In a relatively short span of time, an enormous amount of information has been generated by this research effort. ...
Euro Plus Pact
The Euro-Plus Pact (or Euro+ Pact, also initially called the Competitiveness Pact or later the Pact for the Euro), was adopted in March 2011 under EU's Open Method of Coordination, as an intergovernmental agreement between all member states of the European Union (except Croatia, Czech Republic, Hungary, Sweden and UK), in which concrete commitments were made to be working continuously within a new commonly agreed political general framework for the implementation of structural reforms intended to improve competitiveness, employment, financial stability and the fiscal strength of each country. The plan was advocated by the French and German governments as one of many needed political responses to strengthen the EMU in areas which the European sovereign-debt crisis had revealed as being too poorly constructed.The pact was constructed as an attempt to incentivize increased implementation of structural reforms by each participating EU member state, to improve their performance within the four focus areas of the pact, through: (1) A regular bottom-up inter-governmental political dialogue (learning best practices from each other) and (2) A commitment for each state to include reform measures (freely chosen from a broad list of potential policy action responses) in their annual National Reform Programme for those of the areas found in critical need of improvement. In addition, it also featured a commitment to transpose and operationalize one of the Stability and Growth Pact fiscal rules directly into national legislation - to make it more effectively working, and a commitment to perform regular ""structured dialogue"" for enhanced tax policy coordination in EU.In May 2015, the European Political Strategy Centre (in-house think tank of the European Commission) upon its analysis of the latest set of submitted National Reform Programmes, declared the pact was in a dormant state (not being actively used or referred to by the majority of participating states), and recommended it should be revived by moving it from its current intergovernmental state to become an integrated part of the European Semester in the EU framework law. In the latest approved plan for reforming the EMU, this recommendation was adopted with a target for its transposition to take place at the latest in June 2017.