Search Results - subject:"order approximation"

Optimal simple and implementable monetary and fiscal rules

Schmitt-Grohé, Stephanie; Uribe, Martín - 2007

This paper computes welfare-maximizing monetary and fiscal policy rules in a real business cycle model augmented with sticky prices, a demand for money, taxation, and stochastic government consumption. We consider simple feedback rules whereby the nominal interest rate is set as a function of...

Persistent link: https://www.econbiz.de/10010292297

The measurement of social welfare

Tsuneki, Atsushi - 2007

This paper derives a basic formula for the measure of social welfare, a second order approximation to the difference of …

Persistent link: https://www.econbiz.de/10010332307

Welfare implications of Calvo vs. Rotemberg pricing assumptions

Lombardo, Giovanni; Vestin, David - 2007

This paper compares the welfare implications of two widely used pricing assumptions in the New-Keynesian literature: Calvo-pricing vs. Rotemberg-pricing. We show that despite the strong similarities between the two assumptions to a first order of approximation, in general they might entail...

Persistent link: https://www.econbiz.de/10011604816

Interest Rate Rules and Welfare in Open Economies

Senay, Ozge - Centre for Dynamic Macroeconomic Analysis, University … - 2007

, F41. Keywords: Welfare, Monetary Policy, Interest Rate Rules, Second Order Approximation. 1 Introduction Recent … open economy model is technically much more diﬃcult than in a closed economy model. In fact, the second-order approximation … second-order approximation techniques, Benigno and Woodford (2004) have shown that price stabilisation is not optimal when …

Persistent link: https://www.econbiz.de/10005807923

Trade Openness and the Cost of Sudden Stops: The Role of Financial Friction

Liu, Xuan - Volkswirtschaftliche Fakultät, … - 2007

This paper studies the long-run welfare effect of the extra volatility of country spread due to the possibility of sudden stops. Both analytical and numerical results show that sudden stops have weaker output impact when the small open economy is more open to trade. However, welfare consequences...

Persistent link: https://www.econbiz.de/10008533573

Welfare implications of Calvo vs. Rotemberg pricing assumptions

Lombardo, Giovanni; Vestin, David - European Central Bank - 2007

Persistent link: https://www.econbiz.de/10005344821

Higher Order Approximations of Indeterminacy

Weder, Mark - School of Economics, University of Adelaide - 2007

This paper lays out an algorithm that computes accurate second order solutions for dynamic stochastic general equilibrium models that are subject to indeterminacy of rational expectations.

Persistent link: https://www.econbiz.de/10008568468

Welfare Gains from Optimal Policy in a Partially Dollarized Economy

Machicado, Carlos Gustavo - 2006

a second-order approximation technique. The primary conclusions are that the welfare gains under optimal monetary policy …

Persistent link: https://www.econbiz.de/10011941021

Alternative Perspectives on Optimal Public Debt Adjustment

Horvath, Michal - Centre for Dynamic Macroeconomic Analysis, University … - 2006

the rate of time preference of agents. To a second-order approximation in a stochastic setting, debt follows a unit root … expression will include Et 1X T=t T t b t 1 + !: (C.1) Under conditional expectations, given the second-order approximation to …

Persistent link: https://www.econbiz.de/10005036274

Welfare Gains from Optimal Policy in a Partially Dollarized Economy

Machicado, Carlos Gustavo - Instituto de Estudios Avanzados en Desarrollo (INESAD) - 2006

a second-order approximation technique. The primary conclusions are that the welfare gains under optimal monetary policy …

Persistent link: https://www.econbiz.de/10005021945