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a speech at the Center for Economic Policy Studies and on the occasion of the Seventy-Fifth Anniversary of the Woodrow Wilson School of Public and International Affairs, Princeton University, Princeton, New Jersey
Persistent link: https://www.econbiz.de/10010725142
remarks at the Economic Club of New York, New York, New York, April 11, 2011
Persistent link: https://www.econbiz.de/10010729284
In a stylized DSGE model with an energy sector, the optimal policy response to an adverse energy supply shock implies a rise in core inflation, a larger rise in headline inflation, and a decline in wage inflation. The optimal policy is well-approximated by policies that stabilize the output gap,...
Persistent link: https://www.econbiz.de/10005368420
We construct an optimizing-agent model of a closed economy which is simple enough that we can use it to make exact utility calculations. There is a stabilization problem because there are one-period nominal contracts for wages, or prices, or both and shocks that are unknown at the time when...
Persistent link: https://www.econbiz.de/10005368489
This paper develops an alternative test of the neutrality of anticipated monetary policy. A multi-good equilibrium model along the lines of Barro and Hercowitz is used to derive a neutrality proposition for anticipated movements in the aggregate price level and to demonstrate econometrically its...
Persistent link: https://www.econbiz.de/10005498851
We analyze welfare maximizing monetary policy in a dynamic two-country model with price stickiness and imperfect competition. In this context, a typical terms of trade externality affects policy interaction between independent monetary authorities. Unlike the existing literature, we remain...
Persistent link: https://www.econbiz.de/10005498879
Persistent link: https://www.econbiz.de/10005514196
This paper employs stochastic simulations of a small structural rational expectations model to investigate the consequences of the zero bound constraint on nominal interest rates. We find that if the economy is subject to stochastic shocks similar in magnitude to those experienced in the U.S....
Persistent link: https://www.econbiz.de/10005393669
This study pursues two addenda to the practitioner and academic on the effect of monetary policy on asset prices. First, this paper applies cointegration theory, and, second, relaxes the stringent assumption in the literature that changes in 10-year Treasury yields, stock returns, and changes in...
Persistent link: https://www.econbiz.de/10005393989
A model that contains no costs to changing prices but in which prices do not respond to nominal shocks is presented. In models that do not feature superneutrality of money flexible price equilibria will allow certain types of monetary shocks to affect the real economy. Sticky price behavior may...
Persistent link: https://www.econbiz.de/10005712634