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Price stability and monetary policy effectiveness when nominal interest rates are bounded at zero

Coenen, Günter; Orphanides, Athanasios; Wieland, Volker - 2003

This paper employs stochastic simulations of a small structural rational expectations model to investigate the consequences of the zero bound on nominal interest rates. We ﬁnd that if the economy is subject to stochastic shocks similar in magnitude to those experienced in the U.S. over the...

Persistent link: https://www.econbiz.de/10009635983

Exchange-rate policy and the zero bound on nominal interest rates

Coenen, Günter; Wieland, Volker - 2004

In this paper, we study the effectiveness of monetary policy in a severe recession and deﬂation when nominal interest rates are bounded at zero. We compare two alternative proposals for ameliorating the effect of the zero bound: an exchange-rate peg and price-level targeting. We conduct this...

Persistent link: https://www.econbiz.de/10009639404

The zero-interest-rate bound and the role of the exchange rate for monetary policy in Japan

Coenen, Günter; Wieland, Volker - 2003

In this paper we study the role of the exchange rate in conducting monetary policy in an economy with near-zero nominal interest rates as experienced in Japan since the mid-1990s. Our analysis is based on an estimated model of Japan, the United States and the euro area with rational expectations...

Persistent link: https://www.econbiz.de/10009639849

Money in monetary policy design

Beck, Guenter W.; Wieland, Volker - 2010

the possibility of persistent central bank misperceptions. Such misperceptions motivate the search for policies that … significant cross-check with monetary information, when the New-Keynesian model is the central bank’s preferred model. The cross …-check is shown to be effective in offsetting persistent deviations of inflation due to central bank misperceptions. …

Persistent link: https://www.econbiz.de/10009640349

Insurance policies for monetary policy in the euro area

Kuester, Keith; Wieland, Volker - 2005

In this paper, we examine the cost of insurance against model uncertainty for the Euro area considering four alternative reference models, all of which are used for policy-analysis at the ECB. We find that maximal insurance across this model range in terms of a Minimax policy comes at moderate...

Persistent link: https://www.econbiz.de/10011604526

Central Bank misperceptions and the role of money in interest rate rules

Beck, Günter W.; Wieland, Volker - 2008

-check for monetary policy. We identify an important source of monetary trends in form of persistent central bank misperceptions …

Persistent link: https://www.econbiz.de/10011605013

Money in monetary policy design: Monetary cross-checking in the New-Keynesian model

Wieland, Volker; Beck, Günter W. - 2010

Persistent link: https://www.econbiz.de/10011605237

Money in monetary policy design under uncertainty: the Two-Pillar Phillips Curve versus ECB-style cross-checking

Beck, Günter W.; Wieland, Volker - 2007

The European Central Bank has assigned a special role to money in its two pillar strategy and has received much … bank's interest rate rule is based on a standard model of the monetary transmission process that underlies many … deviations of long-run money growth helps the central bank to overcome this bias. Our argument in favor of ECB-style cross …

Persistent link: https://www.econbiz.de/10010295857

Insurance policies for monetary policy in the Euro area

Küster, Keith; Wieland, Volker - 2005

In this paper, we examine the cost of insurance against model uncertainty for the Euro area considering four alternative reference models, all of which are used for policy-analysis at the ECB.We find that maximal insurance across this model range in terms of aMinimax policy comes at moderate...

Persistent link: https://www.econbiz.de/10010298303

Stochastic optimization and worst-case analysis in monetary policy design

Rustem, Berc; Wieland, Volker; Zakovic, Stan - 2005

In this paper we compare expected loss minimization to worst-case or minimax analysis in the design of simple Taylor-style rules for monetary policy using a small model estimated for the euro area by Orphanides and Wieland (2000). We find that rules optimized under a minimax objective in the...

Persistent link: https://www.econbiz.de/10010298304