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This paper demonstrates how time consistency of the Ramsey policy - the optimal fiscal and monetary policy under commitment - can be achieved. Each government should leave its successor with a unique maturity structure for the nominal and indexed debt, such that the marginal benefit of a...
Persistent link: https://www.econbiz.de/10013232768
order to stabilize the real economy. A modified Taylor curve, the forecast Taylor curve, showing the tradeoff between the … achieved an efficient stabilization of both inflation and the real economy and what relative weight on the stability of … inflation and the real economy has effectively been applied. Ex ante evaluation may be more relevant than evaluation ex post …
Persistent link: https://www.econbiz.de/10013150832
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include among the predetermined variables (the quot;statequot; of the economy) the vector of nonzero means of future shocks to …
Persistent link: https://www.econbiz.de/10012757526
open economy. The main results are, first, that the transmission of shocks depends substantially on the conduct of monetary …
Persistent link: https://www.econbiz.de/10012758144
We show how to construct optimal policy projections in Ramses, the Riksbank's open-economy medium-sized DSGE model for … transmission of shocks. Finally, we use the model to assess the recent Great Recession in the world economy and how its impact on …
Persistent link: https://www.econbiz.de/10012759208
We explore the implications of current account adjustment for monetary policy within a simple two-country DSGE model. Our framework nests Obstfeld and Rogoff's (2005) static model of exchange rate responsiveness to current account reversals. It extends this approach by endogenizing the dynamic...
Persistent link: https://www.econbiz.de/10012759418
We study the design of optimal monetary policy under uncertainty in a dynamic stochastic general equilibrium models. We use a Markov jump-linear-quadratic (MJLQ) approach to study policy design, approximating the uncertainty by different discrete modes in a Markov chain, and by taking...
Persistent link: https://www.econbiz.de/10012759442