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Political Economics and Macroeconomic Policy

Persson, Torsten; Tabellini, Guido - C.E.P.R. Discussion Papers - 1997

incentive constraints on the policy-making process, such as lack of credibility, political opportunism, political ideology, and …, and focuses on credibility, political business cycles, and optimal design of monetary institutions. Part II deals with … fiscal policy in a dynamic general equilibrium set up; the main topics covered in this section are credibility of tax policy …

Persistent link: https://www.econbiz.de/10005498016

The Science of Monetary Policy: A New Keynesian Perspective

Clarida, Richard; Galí, Jordi; Gertler, Mark - C.E.P.R. Discussion Papers - 1999

This paper reviews the recent literature on monetary policy rules. We exposit the monetary policy design problem within a simple baseline theoretical framework. We then consider the implications of adding various real world complications. Among other things, we show that the optimal policy...

Persistent link: https://www.econbiz.de/10005666476

Delegation of Monetary Policy: More than a Relocation of the Time-Inconsistency Problem

Driffill, John; Rotondi, Zeno - C.E.P.R. Discussion Papers - 2003

It has been argued that delegation of monetary policy to an independent central bank, which acts as an agent for the government, does not mitigate the problem of time-inconsistency, but merely relocates it. We argue here that this is not so, and that delegation enables a wider class of economies...

Persistent link: https://www.econbiz.de/10005656362

The Macroeconomic Costs and Benefits of the EMU and other Monetary Unions: An Overview of Recent Research

Beetsma, Roel; Giuliodori, Massimo - C.E.P.R. Discussion Papers - 2009

This article provides an overview of recent research into the macroeconomic costs and benefits of monetary unification. We are primarily interested in Europe’s monetary union. Given that unification entails the loss of a policy instrument its potential benefits have to be found elsewhere....

Persistent link: https://www.econbiz.de/10008477181

Optimal Monetary Policy using a VAR

Polito, Vito; Wickens, Michael R. - C.E.P.R. Discussion Papers - 2008

In this paper we propose a new way to formulate optimal policy based on a quadratic intertemporal welfare function where the dynamic constraint is based on a VAR model of the economy which we call the PVAR method. We argue that the VAR under control should not be derived simply by replacing the...

Persistent link: https://www.econbiz.de/10005497823

Sticky Prices and Monetary Policy: Evidence from Disaggregated US Data

Boivin, Jean; Giannoni, Marc; Mihov, Ilian - C.E.P.R. Discussion Papers - 2007

This paper disentangles fluctuations in disaggregated prices due to macroeconomic and sectoral conditions using a factor-augmented vector autoregression estimated on a large data set. On the basis of this estimation, we establish eight facts: (1) Macroeconomic shocks explain only about 15% of...

Persistent link: https://www.econbiz.de/10005497865

The Monetary Transmission Mechanism: Evidence from the G-7 Countries

Gerlach, Stefan; Smets, Frank - C.E.P.R. Discussion Papers - 1995

In this paper we compare the effects of monetary policy on output and prices in the G-7 countries using a parsimonious macroeconometric model comprising output, prices and a short-term interest rate. We identify monetary policy shocks by assuming that they do not affect real output...

Persistent link: https://www.econbiz.de/10005498157

The ECB and the banks: the tale of two crises

Reichlin, Lucrezia - C.E.P.R. Discussion Papers - 2013

The paper is a narrative on monetary policy and the banking sector during the two recent euro area recessions. It shows that while in the two episodes of recession and financial stress the ECB acted aggressively providing liquidity to banks, the second recession, unlike the first, has been...

Persistent link: https://www.econbiz.de/10011083257

Exchange Rate Flexibility under the Zero Lower Bound

Cook, David; Devereux, Michael B - C.E.P.R. Discussion Papers - 2014

An independent currency and a flexible exchange rate generally helps a country in adjusting to macroeconomic shocks. But recently in many countries, interest rates have been pushed down close to the lower bound, limiting the ability of policy-makers to accommodate shocks, even in countries with...

Persistent link: https://www.econbiz.de/10011083336

Monetary Policy and Bank Lending Rates in Low-Income Countries: Heterogeneous Panel Estimates

Mishra, Prachi; Montiel, Peter J; Pedroni, Peter; … - C.E.P.R. Discussion Papers - 2014

This paper studies the transmission of monetary shocks to lending rates in a large sample of advanced, emerging, and low-income countries. Transmission is measured by the impulse response of bank lending rates to monetary policy shocks. Long-run restrictions are used to identify such shocks....

Persistent link: https://www.econbiz.de/10011083597