The European Central Bank - History, role and functions, October 2004
... that the governors of the NCBs of the new EU Member States have been members of the ECB’s General Council since 1 May 2004 and that, since the same date, these NCBs have been full members of the European System of Central Banks (ESCB). The eventual adoption of the single currency, after due converge ...
... that the governors of the NCBs of the new EU Member States have been members of the ECB’s General Council since 1 May 2004 and that, since the same date, these NCBs have been full members of the European System of Central Banks (ESCB). The eventual adoption of the single currency, after due converge ...
Dormant Shocks and Fiscal Virtue
... prompt return to the virtuous regime and in‡ation starts moving to keep debt on a stable path. Shocks which were dormant under the virtuous policy mix start now manifesting themselves. These changes are initially imperceptible, but they unfold over decades and accelerate as agents get convinced that ...
... prompt return to the virtuous regime and in‡ation starts moving to keep debt on a stable path. Shocks which were dormant under the virtuous policy mix start now manifesting themselves. These changes are initially imperceptible, but they unfold over decades and accelerate as agents get convinced that ...
What Is Wrong with Taylor Rules? Using
... Thus, the answer from most of the literature on monetary-policy rules to the question posed above seems to be that central banks should commit to following a specific simple instrument rule. Indeed, Federal Reserve Board Governor Yellen, in a discussion of inflation targeting at the FOMC meeting in ...
... Thus, the answer from most of the literature on monetary-policy rules to the question posed above seems to be that central banks should commit to following a specific simple instrument rule. Indeed, Federal Reserve Board Governor Yellen, in a discussion of inflation targeting at the FOMC meeting in ...
... be self-ful¯lling. Similarly, a large value of ® reduces the likelihood that this type of equilibrium could exist. The previous intuition also shows why a large value of ¯ can actually increase the likelihood that in°ation expectations are self-ful¯lling in our model. That is because the rise in th ...
Escaping the Great Recession - Centre for Economic Policy Research
... of the zero lower bound. However, such an announcement would also result in an increase in macroeconomic volatility once the economy is out of the zero lower bound. The two results go together. The announcement is e¤ective if and only if it is able to convince agents that the Fiscally led policy mix ...
... of the zero lower bound. However, such an announcement would also result in an increase in macroeconomic volatility once the economy is out of the zero lower bound. The two results go together. The announcement is e¤ective if and only if it is able to convince agents that the Fiscally led policy mix ...
Simons, Friedman and the development of monetary
... concluded: “We can safely say that when he chose his price-stabilization rule, Simons had available to him not only monetary data that revealed roughly the same changes [as the data in Friedman and Schwartz (1963)] but even an alternative interpretation of these data which in its broad lines agreed ...
... concluded: “We can safely say that when he chose his price-stabilization rule, Simons had available to him not only monetary data that revealed roughly the same changes [as the data in Friedman and Schwartz (1963)] but even an alternative interpretation of these data which in its broad lines agreed ...
NBER WORKING PAPER SERIES MONETARY POLICY AND SECTORAL SHOCKS:
... The long boom experienced by the U.S. during the 90’s came to an end in 2001 with a large decline in information technology (IT) investment. After growing at 16% during 2000, IT spending fell by 6% in 2001, while the NASDAQ lost half its value between September 2000 and March 2001. The Federal Reser ...
... The long boom experienced by the U.S. during the 90’s came to an end in 2001 with a large decline in information technology (IT) investment. After growing at 16% during 2000, IT spending fell by 6% in 2001, while the NASDAQ lost half its value between September 2000 and March 2001. The Federal Reser ...
Monetary Policy, Fiscal Policy, and Secular Stagnation at the Zero
... zero lower bound – cannot be lowered further, this would prevent conventional monetary policy from adequately stimulating demand and, hence, economic growth. The economy could then fall into a self-enforcing era of economic stagnation unless bold monetary and fiscal stimuli and far-reaching structur ...
... zero lower bound – cannot be lowered further, this would prevent conventional monetary policy from adequately stimulating demand and, hence, economic growth. The economy could then fall into a self-enforcing era of economic stagnation unless bold monetary and fiscal stimuli and far-reaching structur ...
Declining Output Volatility: What Role for
... growth of a number of automatic stabilisers, including income tax, unemployment compensation and welfare programs. While this may be true, it would be difficult to establish without the aid of a structural model to identify shocks. Changes in the volatility of the non-discretionary fiscal balance (a ...
... growth of a number of automatic stabilisers, including income tax, unemployment compensation and welfare programs. While this may be true, it would be difficult to establish without the aid of a structural model to identify shocks. Changes in the volatility of the non-discretionary fiscal balance (a ...
Liquidity Trap and Excessive Leverage
... A number of recent papers, e.g., Farhi and Werning (2012ab, 2015) and SchmittGrohe and Uribe (2011, 2012ab), also analyze aggregate demand externalities in contexts similar to ours. Schmitt-Grohe and Uribe analyze economies with …xed exchange rates that exhibit downward rigidity in nominal wages. Th ...
... A number of recent papers, e.g., Farhi and Werning (2012ab, 2015) and SchmittGrohe and Uribe (2011, 2012ab), also analyze aggregate demand externalities in contexts similar to ours. Schmitt-Grohe and Uribe analyze economies with …xed exchange rates that exhibit downward rigidity in nominal wages. Th ...
Debt, Labor Markets and the Creation and Destruction of Firms
... When this is the case, there are externalities associated with rm liquidations as well as with their capital structure choices. These include negative externalities imposed on unemployed workers in the event of liquidation (i.e., liquidation causes the unemployed to have more workers to compete with ...
... When this is the case, there are externalities associated with rm liquidations as well as with their capital structure choices. These include negative externalities imposed on unemployed workers in the event of liquidation (i.e., liquidation causes the unemployed to have more workers to compete with ...
Dispersed Information over the Business Cycle
... of equilibrium allocations to private information and thereby to enhance the equilibrium degree of social learning. The key insight is that, when firms expect taxes to fall with realized aggregate productivity, they find it optimal to react more strongly to any private information they might have a ...
... of equilibrium allocations to private information and thereby to enhance the equilibrium degree of social learning. The key insight is that, when firms expect taxes to fall with realized aggregate productivity, they find it optimal to react more strongly to any private information they might have a ...
Some Lessons from Six Years of Practical Inflation
... of stabilizing both, in an appropriate trade-off. This applies both to the Riksbank and the Federal Reserve. ...
... of stabilizing both, in an appropriate trade-off. This applies both to the Riksbank and the Federal Reserve. ...
Monetary/Fiscal Policy Mix and Agents` Beliefs
... Under the AM/PF regime, instead, agents expect that the necessary fiscal adjustments will be made and the impact of the expenditure shock on inflation is largely reduced. However, given that agents form expectations taking into account the possibility of regime changes, the increase in the fiscal bu ...
... Under the AM/PF regime, instead, agents expect that the necessary fiscal adjustments will be made and the impact of the expenditure shock on inflation is largely reduced. However, given that agents form expectations taking into account the possibility of regime changes, the increase in the fiscal bu ...
T h e e f f e c... t h e p e r f o...
... the performance of simple policy rules Aaron Drew and Benjamin Hunt, Economics Department, Reserve Bank of New Zealand In this paper, stochastic simulations of the Reserve Bank of New Zealand’s macroeconomic model, FPS, are used to examine the implication of uncertainty about potential output for si ...
... the performance of simple policy rules Aaron Drew and Benjamin Hunt, Economics Department, Reserve Bank of New Zealand In this paper, stochastic simulations of the Reserve Bank of New Zealand’s macroeconomic model, FPS, are used to examine the implication of uncertainty about potential output for si ...
Money Demand Stability and Inflation Prediction in the Four Largest
... Thereby, it introduces a bias against, and reinforces any forecasting success of, national monetary indicators. Following the literature, we assumed that real money demand depends on real GDP as the transaction variable and one or more indicators of the opportunity costs of holding M3 like an intere ...
... Thereby, it introduces a bias against, and reinforces any forecasting success of, national monetary indicators. Following the literature, we assumed that real money demand depends on real GDP as the transaction variable and one or more indicators of the opportunity costs of holding M3 like an intere ...
What Ends Recessions? - The University of Chicago Booth School
... output paths under alternative policies. They obtained similar multipliers and reached similar monetarist conclusions. Their paper even has "Monetary and Fiscal Actions" in the title. This is known as the "St. Louis Fed" approach, in their memory. (See the discussion in Sargent's 1979 textbook, p. 2 ...
... output paths under alternative policies. They obtained similar multipliers and reached similar monetarist conclusions. Their paper even has "Monetary and Fiscal Actions" in the title. This is known as the "St. Louis Fed" approach, in their memory. (See the discussion in Sargent's 1979 textbook, p. 2 ...
- macroeconomics.tu
... In this paper, we combine these arguments and show that for suboptimal wage adjustments to productivity, monetary policy improves upon the allocation of supply side risk at the cost of fluctuating prices. The optimal monetary policy rule balances costs of price fluctuations with efficiency gains fr ...
... In this paper, we combine these arguments and show that for suboptimal wage adjustments to productivity, monetary policy improves upon the allocation of supply side risk at the cost of fluctuating prices. The optimal monetary policy rule balances costs of price fluctuations with efficiency gains fr ...
NBER WORKING PAPER SERIES THE ELUSIVE WELFARE ECONOMICS OF PRICE STABILITY
... multiple monetary distortions is intended as an antidote to recent theoretical work that over-anticipates possible future technological and institutional developments leading to a cashless society, that is, a world without a unique, distinct, government-issued means of payment and medium of exchang ...
... multiple monetary distortions is intended as an antidote to recent theoretical work that over-anticipates possible future technological and institutional developments leading to a cashless society, that is, a world without a unique, distinct, government-issued means of payment and medium of exchang ...
Monetary/Fiscal Interactions: Nominal Indeterminacy
... bounded equilibria. In this case, the price level is pinned down if we specify monetary policy as an interest-rate rule (reacting to in‡ation) that obeys the Taylor Principle or a policy that sets an exogenous path for the money supply ...
... bounded equilibria. In this case, the price level is pinned down if we specify monetary policy as an interest-rate rule (reacting to in‡ation) that obeys the Taylor Principle or a policy that sets an exogenous path for the money supply ...
non-neutrality of open-market operations
... bank’s solvency and therefore require a change in the monetary policy stance that tilts equilibrium prices and output. The value of money should change – i.e. inflation rises – up to the point in which private agents are forced to hold more currency, so that the seigniorage earnings of the central b ...
... bank’s solvency and therefore require a change in the monetary policy stance that tilts equilibrium prices and output. The value of money should change – i.e. inflation rises – up to the point in which private agents are forced to hold more currency, so that the seigniorage earnings of the central b ...
Essays on Monetary and Fiscal Policy M Beatriz de Blas Pérez June 2002
... in particular if central bankers are concerned with macroeconomic stabilization issues, and use interest rates as instruments to conduct monetary policy. In Chapter 1, the e¤ects of endogenously driven monetary policy versus an exogenous constant money growth rule are investigated in a limited parti ...
... in particular if central bankers are concerned with macroeconomic stabilization issues, and use interest rates as instruments to conduct monetary policy. In Chapter 1, the e¤ects of endogenously driven monetary policy versus an exogenous constant money growth rule are investigated in a limited parti ...
NBER WORKING PAPER SERIES THE FALLACY OF THE FISCAL Willem H. Buiter
... According to this Ricardian postulate about the proper specification of budget constraints, a non-Ricardian fiscal rule that rules out default, is ill-posed. Any model that incorporates a nonRicardian fiscal rule, yet assumes that all contractual debt obligations are met, does not make economic sens ...
... According to this Ricardian postulate about the proper specification of budget constraints, a non-Ricardian fiscal rule that rules out default, is ill-posed. Any model that incorporates a nonRicardian fiscal rule, yet assumes that all contractual debt obligations are met, does not make economic sens ...
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.