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Exchange Rate Pass-through and Monetary Policy in South Africa

Aron, Janine; Farrell, Greg; Muellbauer, John; … - C.E.P.R. Discussion Papers - 2010

Understanding how import prices adjust to exchange rates helps anticipate inflation effects and monetary policy … inflation targeting when account is taken of temporary shifts to foreign currency invoicing or increased hedging after large …

Persistent link: https://www.econbiz.de/10008784768

Non-stationary Hours in a DSGE Model

Chang, Yongsung; Doh, Taeyoung; Schorfheide, Frank - C.E.P.R. Discussion Papers - 2005

The time series fit of dynamic stochastic general equilibrium (DSGE) models often suffers from restrictions on the long-run dynamics that are at odds with the data. Relaxing these restrictions can close the gap between DSGE models and vector autoregressions. This paper modifies a simple...

Persistent link: https://www.econbiz.de/10005497949

Is Monetary Policy in an Open Economy Fundamentally Different?

Monacelli, Tommaso - C.E.P.R. Discussion Papers - 2012

Openness per se requires optimal monetary policy to deviate from the canonical closed-economy principle of domestic price stability, even if domestic prices are the only ones to be sticky. I review this argument using a simple partial equilibrium analysis in an economy that trades in final...

Persistent link: https://www.econbiz.de/10011083335

Understanding the Gains from Wage Flexibility: The Exchange Rate Connection

Galí, Jordi; Monacelli, Tommaso - C.E.P.R. Discussion Papers - 2014

We study the gains from increased wage flexibility and their dependence on exchange rate policy, using a small open economy model with staggered price and wage setting. Two results stand out: (i) the impact of wage adjustments on employment is smaller the more the central bank seeks to stabilize...

Persistent link: https://www.econbiz.de/10011083937

Optimal Policy for Macro-Financial Stability

Benigno, Gianluca; Chen, Huigang; Otrok, Christopher; … - C.E.P.R. Discussion Papers - 2012

In this paper we study whether policy makers should wait to intervene until a financial crisis strikes or rather act in a preemptive manner. We study this question in a relatively simple dynamic stochastic general equilibrium model in which crises are endogenous events induced by the presence of...

Persistent link: https://www.econbiz.de/10011084032

Globalization and Monetary Control

Woodford, Michael - C.E.P.R. Discussion Papers - 2007

central banks to control inflation within their borders, at least in the absence of coordination of policy with other central … the ability of monetary policy to control inflation: by making liquidity premia a function of 'global liquidity' rather … to control the dynamics of inflation. …

Persistent link: https://www.econbiz.de/10005662247

Counter-Inflationary Policy in the Framework of the EMS

Artis, Michael J - C.E.P.R. Discussion Papers - 1992

narrowed ahead of inflation divergence. Cross-country real interest rankings would then assume a negative correlation with the … corresponding inflation rankings. The paper argues that on theoretical grounds, a perverse correlation between real interest rates … and inflation can be predicted for `old EMS' conditions. Empirical evidence supports this prediction while failing to …

Persistent link: https://www.econbiz.de/10005662333

A New Comparative Approach to Macroeconomic Modeling and Policy Analysis

Cwik, Tobias; Mueller, Gernot; Schmidt, Sebastian; … - C.E.P.R. Discussion Papers - 2012

In the aftermath of the global financial crisis, the state of macroeconomic modeling and the use of macroeconomic models in policy analysis has come under heavy criticism. Macroeconomists in academia and policy institutions have been blamed for relying too much on a particular class of...

Persistent link: https://www.econbiz.de/10011083870

Betting the House

Jordà, Òscar; Schularick, Moritz; Taylor, Alan M. - C.E.P.R. Discussion Papers - 2014

Is there a link between loose monetary conditions, credit growth, house price booms, and financial instability? This paper analyzes the role of interest rates and credit in driving house price booms and busts with data spanning 140 years of modern economic history in the advanced economies. We...

Persistent link: https://www.econbiz.de/10011145419

Caution or Activism? Monetary Policy Strategies in an Open Economy

Ellison, Martin; Sarno, Lucio; Vilmunen, Jouko - C.E.P.R. Discussion Papers - 2004

We examine optimal policy in a two-country model with uncertainty and learning, where monetary policy actions affect the real economy through the real exchange rate channel. Our results show that whether policy should be cautious or activist depends on the size of one country relative to...

Persistent link: https://www.econbiz.de/10005067656