Forward guidance through interest rate projections
... Although the term forward guidance is relatively new, the idea that central banks, through various means of communication, can affect expected interest rates is not. Various forms of forward guidance have been used since the late 1990s. Traditionally, forward guidance amounted to verbal, often subtl ...
... Although the term forward guidance is relatively new, the idea that central banks, through various means of communication, can affect expected interest rates is not. Various forms of forward guidance have been used since the late 1990s. Traditionally, forward guidance amounted to verbal, often subtl ...
Jacob A. Frenkel Joshua Aizenman Working Paper No. 1329
... Thus, the focus has shifted towards finding the optimal mix of the fixed and the flexible exchange rate regimes. Consequently, that analysis has attempted to determine the optimal degree of exchange rate management [e.g., Frenkel and Aizenman (1982) and the references thereupon]. ...
... Thus, the focus has shifted towards finding the optimal mix of the fixed and the flexible exchange rate regimes. Consequently, that analysis has attempted to determine the optimal degree of exchange rate management [e.g., Frenkel and Aizenman (1982) and the references thereupon]. ...
Taxa Real de Câmbio, Mobilidade de Capitais e Mudança Estrutural
... (considering a fixed exchange-rate regime) induced by the growth rate of real output2. In this setting, it is possible the construction of dynamic models where initial conditions largely determine the long-run growth rate3. Kaldorian cumulative causation models have, in general, four equations: a f ...
... (considering a fixed exchange-rate regime) induced by the growth rate of real output2. In this setting, it is possible the construction of dynamic models where initial conditions largely determine the long-run growth rate3. Kaldorian cumulative causation models have, in general, four equations: a f ...
Current Evidence on the Resource Costs of Irredeemable Paper Money
... average GDP growth for the U.S. economy during the historical period in question. Updating Friedman’s estimate with the thenlower ratio of money to income, Alan Meltzer (1983: 105) arrived at a gold cost figure of roughly 0.5 percent of GDP. The FriedmanMeltzer estimates thus range from a low of $35 ...
... average GDP growth for the U.S. economy during the historical period in question. Updating Friedman’s estimate with the thenlower ratio of money to income, Alan Meltzer (1983: 105) arrived at a gold cost figure of roughly 0.5 percent of GDP. The FriedmanMeltzer estimates thus range from a low of $35 ...
Banking and Currency Crises: How Common Are Twins?
... can lead to a bank crisis if deposit money is used to speculate in the foreign exchange market and banks are “loaned up.” Rojas-Suarez and Weisbrod (1995) and Obstfeld (1994) argue that a currency crisis may lead to problems in a vulnerable banking sector if policymakers respond to the pressure on t ...
... can lead to a bank crisis if deposit money is used to speculate in the foreign exchange market and banks are “loaned up.” Rojas-Suarez and Weisbrod (1995) and Obstfeld (1994) argue that a currency crisis may lead to problems in a vulnerable banking sector if policymakers respond to the pressure on t ...
Farms, Fertiliser, and Financial Frictions: Yields from a DSGE Model
... interest rate rule, replicates the stylised fact that adverse supply shocks lead to a rise in inflation and a fall in output. We find that the financial accelerator materially amplifies the effects of both types of shock considered. We examine the properties of a range of alternative interest rate r ...
... interest rate rule, replicates the stylised fact that adverse supply shocks lead to a rise in inflation and a fall in output. We find that the financial accelerator materially amplifies the effects of both types of shock considered. We examine the properties of a range of alternative interest rate r ...
The Brilliant Economic Theory of Everything: Q. E. D.
... (2002) implies in his study that the fixed exchange rate policy might be more appropriate policy for emerging economies which are interrelated with its trading partners and central banks have low credibility. I will develop small open economy DSGE model augmented by exchange rate passthrough effect ...
... (2002) implies in his study that the fixed exchange rate policy might be more appropriate policy for emerging economies which are interrelated with its trading partners and central banks have low credibility. I will develop small open economy DSGE model augmented by exchange rate passthrough effect ...
Searching for the Natural Rate of Unemployment in a Large Relative
... regarding possible asymmetric effects on inflation of changes in the exchange rate. Like many others (e.g. Gordon, 1997; Staiger et al., 1997; Stiglitz, 1997; Mankiw, 2001; Ball and Mankiw, 2002) this paper considers the terms natural rate of unemployment and NAIRU as synonyms and, therefore, both a ...
... regarding possible asymmetric effects on inflation of changes in the exchange rate. Like many others (e.g. Gordon, 1997; Staiger et al., 1997; Stiglitz, 1997; Mankiw, 2001; Ball and Mankiw, 2002) this paper considers the terms natural rate of unemployment and NAIRU as synonyms and, therefore, both a ...
A Resolution on UIP Puzzle The Case of Korean wonThe United
... investigated whether optimizing policy behavior can account for the observed regime-dependence of UIP evidence. The main result is the tradeoff between interest-rate and exchange-rate stability is a potential candidate for the explanation of the apparent failure of UIP. And Peter Anker (1999) furth ...
... investigated whether optimizing policy behavior can account for the observed regime-dependence of UIP evidence. The main result is the tradeoff between interest-rate and exchange-rate stability is a potential candidate for the explanation of the apparent failure of UIP. And Peter Anker (1999) furth ...
Yip, Paul SL, (2005). The Exchange Rate Systems in Hong
... regional policymakers must accelerate domestic financial and institutional reforms, deepen regionalism, and ensure fiscal discipline if formal monetary arrangements are to advance regional stability beyond informal coordination. -Commitment to formal policy coordination could take the form of a high ...
... regional policymakers must accelerate domestic financial and institutional reforms, deepen regionalism, and ensure fiscal discipline if formal monetary arrangements are to advance regional stability beyond informal coordination. -Commitment to formal policy coordination could take the form of a high ...
Preview Sample File
... Financial markets market and facilitate the transfer of financial assets. 2. Describe the three basic ways whereby money is transferred from savers to investors. There can be a direct transfer of money between savers and investors. For example, savers can directly purchase the stocks or debt instrum ...
... Financial markets market and facilitate the transfer of financial assets. 2. Describe the three basic ways whereby money is transferred from savers to investors. There can be a direct transfer of money between savers and investors. For example, savers can directly purchase the stocks or debt instrum ...
SETTING UP THE MONETARY POLICY FRAMEWORK: WHAT
... panellists pointed out that the primary aim of policy in such times should be to stabilize financial markets and avoid disruptions such as banking panics. These policies require a set of instruments broader than the interest rate set by the central bank, and panellists stressed the challenging natur ...
... panellists pointed out that the primary aim of policy in such times should be to stabilize financial markets and avoid disruptions such as banking panics. These policies require a set of instruments broader than the interest rate set by the central bank, and panellists stressed the challenging natur ...
Industry Price Adjustment to Exchange Rate
... currency country will increase in order for the current account to adjust to equilibrium. The main macroeconomic theory that explained the adjustment of price levels to exchange rates was the monetary approach to the balance of payments. The monetary approach in its most basic form implies the Purch ...
... currency country will increase in order for the current account to adjust to equilibrium. The main macroeconomic theory that explained the adjustment of price levels to exchange rates was the monetary approach to the balance of payments. The monetary approach in its most basic form implies the Purch ...
S h o u l d u n c... l e s s ? Chris Salmon and Ben Martin,
... Recently, interest has grown again in interaction between broader forms of uncertainty and monetary policy. At the Bank of England this has been fuelled, in part, by the existence of an inflation target. Inflation targeting can be viewed as analogous to operating policy with an inflation forecast as ...
... Recently, interest has grown again in interaction between broader forms of uncertainty and monetary policy. At the Bank of England this has been fuelled, in part, by the existence of an inflation target. Inflation targeting can be viewed as analogous to operating policy with an inflation forecast as ...
Some Observations on Turkish Inflation: A “Random
... we know on the nature of the business cycle associated with disinflation programs? What is the main distinction between orthodox versus heterodox programs? Why do we need a “nominal anchor” to disinflate? The need to use a nominal anchor8 during disinflation programs may perhaps best be motivated in ...
... we know on the nature of the business cycle associated with disinflation programs? What is the main distinction between orthodox versus heterodox programs? Why do we need a “nominal anchor” to disinflate? The need to use a nominal anchor8 during disinflation programs may perhaps best be motivated in ...
A Dynamic Enquiry into the Causes of Hyperinflation in Zimbabwe
... Zimbabwean dollars (Z$50)’s worth of groceries. Today a child can even carry five hundred thousand dollars (Z$50 x 104)’s worth of groceries. The study of hyperinflation has fascinated economists for many years, in part because they continue to be concerned about policies required to attain price st ...
... Zimbabwean dollars (Z$50)’s worth of groceries. Today a child can even carry five hundred thousand dollars (Z$50 x 104)’s worth of groceries. The study of hyperinflation has fascinated economists for many years, in part because they continue to be concerned about policies required to attain price st ...
Currency Mismatch, Systemic Risk in Emerging Europe (December 2009)
... included funds from the EU, the World Bank, and bilateral sources (mostly from advanced European economies with bank sector exposures to emerging Europe). Moreover, the IMF programs included specific assumptions on foreign bank rollover rates, which were often negotiated and agreed between the respe ...
... included funds from the EU, the World Bank, and bilateral sources (mostly from advanced European economies with bank sector exposures to emerging Europe). Moreover, the IMF programs included specific assumptions on foreign bank rollover rates, which were often negotiated and agreed between the respe ...
What is the ECB Reaction Function? A Static and
... survey data. By contrast, policy responses to output gap are weak and not significantly different from zero once we control for survey data. Second, formal model comparison based on Bayes factors suggests that a dynamic probit model better takes into account both the discreteness and the serial cor ...
... survey data. By contrast, policy responses to output gap are weak and not significantly different from zero once we control for survey data. Second, formal model comparison based on Bayes factors suggests that a dynamic probit model better takes into account both the discreteness and the serial cor ...
Working Paper 27 – Trends in European Productivity
... prices of home goods.7 Turning to the macroeconomic consequences of the observed trends in relative prices of home goods, one familiar implication pertains to movements in the real exchange rate (the relative price of the national outputs of two countries). The trend in the real exchange rate can be ...
... prices of home goods.7 Turning to the macroeconomic consequences of the observed trends in relative prices of home goods, one familiar implication pertains to movements in the real exchange rate (the relative price of the national outputs of two countries). The trend in the real exchange rate can be ...
Keynes`s approach to money
... provided that they move forward in step” so that clearing losses are compensated by gains. (TOMa p. 23) Finally, in his defense of the GT, he argued “my analysis is not based…on the assumption that the quantity of money is constant.” (CW 14 p. 232) This would seem to be a rejection of the textbook p ...
... provided that they move forward in step” so that clearing losses are compensated by gains. (TOMa p. 23) Finally, in his defense of the GT, he argued “my analysis is not based…on the assumption that the quantity of money is constant.” (CW 14 p. 232) This would seem to be a rejection of the textbook p ...