This PDF is a selection from a published volume from... Economic Research Volume Title: NBER International Seminar on Macroeconomics 2004
... However, when we test the performanceof these policies under learning we find that imperfectknowledge about the structureof the economy adversely affectsthe performanceof certainpolicy rules that deliver good economic outcomes in a world of perfectknowledge. The papershows thatimpreciseparameteresti ...
... However, when we test the performanceof these policies under learning we find that imperfectknowledge about the structureof the economy adversely affectsthe performanceof certainpolicy rules that deliver good economic outcomes in a world of perfectknowledge. The papershows thatimpreciseparameteresti ...
The Macroeconomic Loss Function: a Critical Note (PDF
... have a weight of zero. Another is to replace the actual target levels by pseudo target levels set at the highest observed value of output growth and the lowest observed rate of inflation, so that all deviations from the target will automatically have the same sign. This, however, may make the use of ...
... have a weight of zero. Another is to replace the actual target levels by pseudo target levels set at the highest observed value of output growth and the lowest observed rate of inflation, so that all deviations from the target will automatically have the same sign. This, however, may make the use of ...
Macroeconomic policy challenges: monetary policy 1 Introduction: What, if
... of the ways in which monetary policy affects not only ...
... of the ways in which monetary policy affects not only ...
The Great Recession: Lessons for Macroeconomic Policy from Japan
... been based on simplistic, uncontrolled analyses, observing, for example, that the economy has faltered despite growing fiscal deficits, and concluding from this that fiscal stimulus has failed. Others have relied on comparisons with other countries’ experiences, for example in discussing what a cent ...
... been based on simplistic, uncontrolled analyses, observing, for example, that the economy has faltered despite growing fiscal deficits, and concluding from this that fiscal stimulus has failed. Others have relied on comparisons with other countries’ experiences, for example in discussing what a cent ...
Seigniorage Revenue and Monetary Policy
... bonds. With 1/p < r, Equation 4 implies that q < r. In other words, the reserve requirement ratio drives a wedge between the return on bonds and the return to savings. Suppose there is an increase in the reserve requirement ratio. The quantity of real money balances held by people is gd, where d is ...
... bonds. With 1/p < r, Equation 4 implies that q < r. In other words, the reserve requirement ratio drives a wedge between the return on bonds and the return to savings. Suppose there is an increase in the reserve requirement ratio. The quantity of real money balances held by people is gd, where d is ...
prudential policy do to support monetary policy?
... markets have been liberalised around the globe. Heavily controlled and segmented domestic financial systems have given way to the emergence of a lightly regulated, open and competitive global financial environment. The changes in the real side of the economy have been equally spectacular. The market ...
... markets have been liberalised around the globe. Heavily controlled and segmented domestic financial systems have given way to the emergence of a lightly regulated, open and competitive global financial environment. The changes in the real side of the economy have been equally spectacular. The market ...
How Important are Debt and Growth Expectations for Interest
... A number of findings are reported. First, interest rates are moved by a confluence of expectation shocks at any one particular time. Second, the explanatory power of long-run growth expectations for forward rates rose during crisis periods. Finally, post-GFC changes in the expectations of economic g ...
... A number of findings are reported. First, interest rates are moved by a confluence of expectation shocks at any one particular time. Second, the explanatory power of long-run growth expectations for forward rates rose during crisis periods. Finally, post-GFC changes in the expectations of economic g ...
Joining the European Monetary Union
... only papers on separate countries have appeared and these did not take into account many relevant advantages and disadvantages; or the analysis embraced several countries but was not integral as well; or it employed over‐simplified mathematical models. Some researchers have been over‐optimistic ...
... only papers on separate countries have appeared and these did not take into account many relevant advantages and disadvantages; or the analysis embraced several countries but was not integral as well; or it employed over‐simplified mathematical models. Some researchers have been over‐optimistic ...
Economic crisis in Europe: causes
... The European economy is in the midst of the deepest recession since the 1930s, with real GDP projected to shrink by some 4% in 2009, the sharpest contraction in the history of the European Union. Although signs of improvement have appeared recently, recovery remains uncertain and fragile. The EU’s r ...
... The European economy is in the midst of the deepest recession since the 1930s, with real GDP projected to shrink by some 4% in 2009, the sharpest contraction in the history of the European Union. Although signs of improvement have appeared recently, recovery remains uncertain and fragile. The EU’s r ...
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... consisting of two countries, home and foreign. We de…ne the home country as Germany and the foreign country as Italy. The countries are assumed to be identical except for …scal policy and the degree of impatience (this is explained right below). An international asset allows agents in one country to ...
... consisting of two countries, home and foreign. We de…ne the home country as Germany and the foreign country as Italy. The countries are assumed to be identical except for …scal policy and the degree of impatience (this is explained right below). An international asset allows agents in one country to ...
St Kitts and Nevis, Macroeconomic Framework
... This situation would have been difficult enough to manage, but for SKN the economy faces an additional challenge, namely the country’s exceptionally high public sector debt-to-GDP ratio (around 185% and still rising), and this necessarily has to be managed carefully as part of any credible macroecon ...
... This situation would have been difficult enough to manage, but for SKN the economy faces an additional challenge, namely the country’s exceptionally high public sector debt-to-GDP ratio (around 185% and still rising), and this necessarily has to be managed carefully as part of any credible macroecon ...
Discussion Paper Series - Name
... for states and regimes in the economy, our empirical findings suggest that the exchange rate regime, the presence of exchange controls, and the business cycle all have a significant impact on the size of the government spending multiplier. However, analysing the interaction of these states and regim ...
... for states and regimes in the economy, our empirical findings suggest that the exchange rate regime, the presence of exchange controls, and the business cycle all have a significant impact on the size of the government spending multiplier. However, analysing the interaction of these states and regim ...
Activist Stabilization Policy and Inflation: The Taylor Rule in the 1970s
... over the past several decades has been the pursuit of price stability and maximum sustainable growth over time. Recent studies have suggested that activist stabilization policy rules that respond to inflation and the level of economic activity can achieve these objectives and attain both a low and s ...
... over the past several decades has been the pursuit of price stability and maximum sustainable growth over time. Recent studies have suggested that activist stabilization policy rules that respond to inflation and the level of economic activity can achieve these objectives and attain both a low and s ...
INTRODUCTION REFORMING THE MONETARY REGIME James A. Dorn
... hegemony, says Timberlake, requires privatizing the 12 Federal Reserve Banks and ending the Fed’s monopoly of base money by freezing the base and allowing a market for private currencies. Timberlake also would privatize the Treasury’s gold stock. These reforms, he believes, would restore the monetar ...
... hegemony, says Timberlake, requires privatizing the 12 Federal Reserve Banks and ending the Fed’s monopoly of base money by freezing the base and allowing a market for private currencies. Timberlake also would privatize the Treasury’s gold stock. These reforms, he believes, would restore the monetar ...
NBER WORKING PAPER SERIES OPTIMAL PUBLIC DEBT MANAGEMENT AND LIQUIDITY PROVISION
... Like much of the Ramsey literature, our framework abstracts from sticky prices, Keynesian multipliers, and the like. Whether such effects are relevant in practice or not, they are not central to our contribution. ...
... Like much of the Ramsey literature, our framework abstracts from sticky prices, Keynesian multipliers, and the like. Whether such effects are relevant in practice or not, they are not central to our contribution. ...
Looking at Congressional Committee Deliberations from
... ineffectual policy response, continues to the “revolutionary” actions of the Volcker Fed which began to rein in the inflationary spiral, followed by a long period (from the later 1980s into the new century) of stable low inflation alongside a growing economy, and ending with the early days of the fi ...
... ineffectual policy response, continues to the “revolutionary” actions of the Volcker Fed which began to rein in the inflationary spiral, followed by a long period (from the later 1980s into the new century) of stable low inflation alongside a growing economy, and ending with the early days of the fi ...
Long-term Interest Rates, Risk Premia and Unconventional
... federal funds rate low for an extended period of time.3 While some central banks have previously given guidance about the direction or timing of future policy, these announcements have, at the least, been interpreted as an explicit attempt to influence expectations. ...
... federal funds rate low for an extended period of time.3 While some central banks have previously given guidance about the direction or timing of future policy, these announcements have, at the least, been interpreted as an explicit attempt to influence expectations. ...
Policy Instrument Choice and Non-Coordinated Monetary Policy in
... to monetary policy in open economies. This has been prompted by the development of tractable microfounded general equilibrium models of open economies where sticky prices give a role for monetary policy. These models provide a natural basis for studying the welfare implications of coordinated and no ...
... to monetary policy in open economies. This has been prompted by the development of tractable microfounded general equilibrium models of open economies where sticky prices give a role for monetary policy. These models provide a natural basis for studying the welfare implications of coordinated and no ...
Fiscal solvency and price level determination in a monetary union
... insurance between home and foreign households, as in Woodford (1998). Insurance payments would then o!set the e!ects of any such transfer and maintain a constant wealth distribution. While the assumption of perfect insurance is convenient for solving the model, it conceals the fact that home and for ...
... insurance between home and foreign households, as in Woodford (1998). Insurance payments would then o!set the e!ects of any such transfer and maintain a constant wealth distribution. While the assumption of perfect insurance is convenient for solving the model, it conceals the fact that home and for ...
Heading into Trouble: A Comparison of the Latin
... In addition, in the euro zone there is a negative feedback loop between sovereign debt and the banking sector problems. While this was not present in Latin America during the 80s, in some cases it did take place during the 90s. As is well known, in such a loop, under a negative economic scenario, i ...
... In addition, in the euro zone there is a negative feedback loop between sovereign debt and the banking sector problems. While this was not present in Latin America during the 80s, in some cases it did take place during the 90s. As is well known, in such a loop, under a negative economic scenario, i ...
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... inflation rates will re-emerge. Rogoff [1985a] has demonstrated that the credibility problem of monetary authorities vis-a-vis the private sector may be increased by central bank coordination. Monetary coordination may lead to systematically higher inflation, because it avoids the negative effects ...
... inflation rates will re-emerge. Rogoff [1985a] has demonstrated that the credibility problem of monetary authorities vis-a-vis the private sector may be increased by central bank coordination. Monetary coordination may lead to systematically higher inflation, because it avoids the negative effects ...
Using Monetary Policy Rules in Emerging Market Economies By
... leaning against the wind is a policy of changing the instruments when inflationary pressures change, and this sounds like a contingency plan, and thus like a policy rule. But the policy is not specific at all. It is not specific about what the wind is, how one measures it, or how much one leans aga ...
... leaning against the wind is a policy of changing the instruments when inflationary pressures change, and this sounds like a contingency plan, and thus like a policy rule. But the policy is not specific at all. It is not specific about what the wind is, how one measures it, or how much one leans aga ...
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... quickly intractable. Simple models with only two actors, however, show that important issues that drastically condition the outcome of the bargaining are the exact procedure which defines the sequence and frequency of offers, the costs incurred by the different parties until an agreement is reached, ...
... quickly intractable. Simple models with only two actors, however, show that important issues that drastically condition the outcome of the bargaining are the exact procedure which defines the sequence and frequency of offers, the costs incurred by the different parties until an agreement is reached, ...
overcoming the zero bound on interest rate policy
... rate depreciation, then, would create an increase in net exports, the nominal short interest rate would immediately match the foreign currency interest rate, and prices would move up over time in proportion to the exchange rate depreciation. The expected inflation would imply a low or even negative ...
... rate depreciation, then, would create an increase in net exports, the nominal short interest rate would immediately match the foreign currency interest rate, and prices would move up over time in proportion to the exchange rate depreciation. The expected inflation would imply a low or even negative ...
1 Optimal Monetary Policy When Lump-Sum Taxes Are Unavailable:
... to reach the first-best, ‘Friedman Rule’ outcome of a zero nominal interest rate. In this world, monetary policy must be implemented by open-market swaps of money and government debt, and the optimal second-best policy is to use debt to smooth intertemporally the distortions caused by inflation. Sur ...
... to reach the first-best, ‘Friedman Rule’ outcome of a zero nominal interest rate. In this world, monetary policy must be implemented by open-market swaps of money and government debt, and the optimal second-best policy is to use debt to smooth intertemporally the distortions caused by inflation. Sur ...
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.