Search Results - subject:"Reaction Function"

Optimal simple targeting rules for small open economies

Dennis, Richard J. (contributor) - 2000 - [Elektronische Ressource]

explicit foreign policy reaction function, equation (11). Unlike Svensson (1998), here the foreign policy reaction function is … also that the foreign policy reaction function is determined by minimizing equation (23) with β f = 0.5. Table 1 presents … eight variables in the system are affected by the particular policy reaction function used by policy makers. For the …

Persistent link: https://www.econbiz.de/10001577840

Monetary Policy Rules and the Exchange Rate

Benigno, Gianluca; Benigno, Pierpaolo - 2000

A positive and normative evaluation of alternative monetary policy regimes is addressed in a simple two-country general equilibrium model. The behavior of the exchange rate, as well as of the other macroeconomic variables, depends crucially on the monetary regime chosen, though not necessarily...

Persistent link: https://www.econbiz.de/10014154658

Monetary Policy and Exchange Rate Targeting in Open Economies

Bofinger, Peter; Wollmershäuser, Timo - 2000

We develop an institutional framework for central banks that try to pursue a stability-oriented monetary policy in open-economies by directly targeting the exchange rate. Our main intention is to design a framework which avoids excessive capital inflows that can be regarded as a main cause of...

Persistent link: https://www.econbiz.de/10014161763

Monetary policy and exchange rate targeting in open economies

Bofinger, Peter; Wollmershäuser, Timo - 2000

Persistent link: https://www.econbiz.de/10009232862

Liquidity traps with global Taylor rules

Schmitt-Grohé, Stephanie; Uribe, Martín - 2000

A key result of a recent literature that focuses on the global consequences of Taylor-type interest rate feedback rules is that such rules in combination with the zero bound on nominal interest rates can lead to unintended liquidity traps. An immediate question posed by this result is whether...

Persistent link: https://www.econbiz.de/10011576850

Avoiding liquidity traps

Benhabib, Jess; Schmitt-Grohé, Stephanie; Uribe, Martín - 2000

Once the zero bound on nominal interest rates is taken into account, Taylor-type interest-rate feedback rules give rise to unintended self-fulfilling decelerating inflation paths and aggregate fluctuations driven by arbitrary revisions in expectations. These undesirable equilibria exhibit the...

Persistent link: https://www.econbiz.de/10011577250

Does institutional change really matter? : inflation targets, central bank reform and interest rate policy in the OECD countries

Muscatelli, V. Anton; Tirelli, Patrizio; Trecroci, Carmine - 2000

We estimate forward-looking interest-rate reaction functions for the G3 economies and for a group of countries which recently adopted inflation targets. Some significant shifts in the conduct of monetary policy are detected in the G3 countries, especially in the US A and Japan. In contrast with...

Persistent link: https://www.econbiz.de/10009781553

Policy Rules for Open Economies

Ball, Laurence M. - 2000

This paper examines the choice of a monetary-policy rule in a simple macroeconomic model. In a closed economy, the optimal policy is a output and inflation. In an open economy, the optimal rule changes in two ways. First, the policy instrument is a Conditions Index the exchange rate. Second, on...

Persistent link: https://www.econbiz.de/10012788980

Asymmetric Shocks and Policy Responses: A comparative analysis of the effects of a monetary union.

Wallgren, Arvid - Economics Institute for Research (SIR), … - 1999

This paper analyses how optimal policy responses to productivity shocks change when the government loses the exchange rate as a policy tool after entering a monetary union. It is shown that over the business cycle (generated as cyclical changes in productivity), both deficit and inflation will...

Persistent link: https://www.econbiz.de/10005649134

An encompassing framework for evaluating simple monetary policy rules

Barrell, Ray (contributor); Dury, Karen (contributor); … - 1999 - [Elektronische Ressource]

aggregates. The United Kingdom is not in EMU and so follows its own interest rate reaction function and the results reported for …

Persistent link: https://www.econbiz.de/10001558174