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The Zero-Interest Rate Bound and the Role of the Exchange Rate for Monetary Policy in Japan

Coenen, Günter; Wieland, Volker - C.E.P.R. Discussion Papers - 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/10005788995

Stochastic Optimization and Worst Case Analysis in Monetary Policy Design

Rustem, Berc; Wieland, Volker; Zakovic, Stan - C.E.P.R. Discussion Papers - 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/10005791479

A Small Estimated Euro Area Model with Rational Expectations and Nominal Rigidities

Coenen, Günter; Wieland, Volker - C.E.P.R. Discussion Papers - 2002

In this Paper we estimate a small model of the Euro area to be used as a laboratory for evaluating the performance of alternative monetary policy strategies. We start with the relationship between output and inflation and investigate the fit of the nominal wage contracting model due to Taylor...

Persistent link: https://www.econbiz.de/10005791867

Money in Monetary Policy Design under Uncertainty: The Two-Pillar Phillips Curve versus ECB-Style Cross-Checking

Beck, Günter; Wieland, Volker - C.E.P.R. Discussion Papers - 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 favour of ECB-style cross …

Persistent link: https://www.econbiz.de/10005792117

Insurance Policies for Monetary Policy in the Euro Area

Küster, Keith; Wieland, Volker - C.E.P.R. Discussion Papers - 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/10005792144

Insurance Policies for Monetary Policy in the Euro Area

Kuester, Keith; Wieland, Volker - In: Journal of the European Economic Association 8 (2010) 4, pp. 872-912

In this paper, we aim to design a monetary policy for the euro area that is robust to the high degree of model uncertainty at the start of monetary union and allows for learning about model probabilities. To this end, we compare and ultimately combine Bayesian and worst-case analysis using four...

Persistent link: https://www.econbiz.de/10008557154

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

Beck, Günter; Wieland, Volker - C.E.P.R. Discussion Papers - 2009

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/10008577801

Quantitative Easing: A Rationale and Some Evidence from Japan

Wieland, Volker - National Bureau of Economic Research (NBER) - 2009

This paper reviews the rationale for quantitative easing when central bank policy rates reach near zero levels in light … of recent announcements regarding direct asset purchases by the Bank of England, the Bank of Japan, the U.S. Federal … Reserve and the European Central Bank. Empirical evidence from the previous period of quantitative easing in Japan between …

Persistent link: https://www.econbiz.de/10008548807

A Quantitative Exploration of the Opportunistic Approach to Disinflation

Aksoy, Yunus; Orphanides, Athanasios; Small, David; … - C.E.P.R. Discussion Papers - 2003

long-run objective, the central bank should not move immediately to fight inflation, but rather wait for exogenous … waiting for such circumstances the central bank should counteract any incipient increases in inflation. This approach has come …

Persistent link: https://www.econbiz.de/10005123544

Price Stability and Monetary Policy Effectiveness when Nominal Interest Rates are Bounded at Zero

Coenen, Günter; Orphanides, Athanasios; Wieland, Volker - C.E.P.R. Discussion Papers - 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 US over the 1980s...

Persistent link: https://www.econbiz.de/10005123657