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Central banking and financial stability in the long run

Cao, Jin; Chollete, Lorán - 2013

Most theoretical central bank models use short horizons and focus on a single tradeoff. However, in reality central banks play complex, long horizon games and face more than one tradeoff. We account for these issues in a simple infinite horizon game with a novel tradeoff: higher rates deter...

Persistent link: https://www.econbiz.de/10009753000

Risk management-driven policy rate gap

Caggiano, Giovanni; Castelnuovo, Efrem; Nodari, Gabriela - 2018

of financial uncertainty over the period 1969-2008. We find evidence in favor of a systematic response to financial … uncertainty over and above that to expected inflation, output gap, and output growth. However, this evidence regards the Greenspan …

Persistent link: https://www.econbiz.de/10011884396

Optimal central bank conservatism and monopoly trade unions

Berger, Helge; Hefeker, Carsten; Schöb, Ronnie - 2001

OPTIMThe conservative central banker has come under attack recently. Explicitly modeling the interaction of a trade union with monetary policy, it has been argued that the standard solution to the inflationary bias in monetary policy might actually be welfare reducing if the trade union has an...

Persistent link: https://www.econbiz.de/10011397779

Forward guidance contracts

Gersbach, Hans; Hahn, Volker; Liu, Yulin - 2015 - This version: May 2015

Forward Guidance Contracts can be used when there is uncertainty about natural real interest-rate shocks, a situation which …

Persistent link: https://www.econbiz.de/10010528970

The ECB's fiscal policy

Sinn, Hans-Werner - 2018

While the ECB helped mitigate the euro crisis in the aftermath of Lehman, it has stretched its monetary mandate and moved into fiscal territory. This text describes and summarises the crucial role played by the ECB in the intervention spiral resulting from its bid to manage the crisis. It also...

Persistent link: https://www.econbiz.de/10011845207

The ECB's policy, the recovery fund and the importance of trust : the case of Greece

Dimakopoulou, Vasiliki; Oikonomidēs, Geōrgios; … - 2021

This paper, using a microfounded macroeconomic model that embeds the key features of the Greek economy, studies the efficacy of the various policy measures taken, at national and EU level, to cushion the economic effects of the pandemic shock. The paper attempts to give quantitative answers to...

Persistent link: https://www.econbiz.de/10012650611

When should central banks fear inflation expectations?

Gobbi, Lucio; Mazzocchi, Ronny; Tamborini, Roberto - 2024

When inflation picks up, central banks are most concerned that the de-anchoring of inflation expectations and the ignition of wage-price spirals will trigger inflation dynamic instability. However, such scenarios do not materialize in the standard New Keynesian theoretical framework for monetary...

Persistent link: https://www.econbiz.de/10014478734

Can central banks do the unpleasant job that governments should do?

Dimakopoulou, Vasiliki; Oikonomidēs, Geōrgios; … - 2023

We investigate what happens when the fiscal authorities do not react to rising public debt so that the unpleasant task of fiscal sustainability falls upon the Central Bank (CB). In particular, we explore whether the CB's bond purchases in the secondary market can restore stability and...

Persistent link: https://www.econbiz.de/10014331713

Perceived uncertainty shocks, excess optimism-pessimism, and learning in the business cycle

Chatterjee, Pratiti; Milani, Fabio - 2020

What are the effects of beliefs, sentiment, and uncertainty, over the business cycle? To answer this question, we …) and their beliefs may be influenced by their perceptions about future uncertainty. We estimate the behavioral model using … fluctuations. Shifts in perceived uncertainty can also affect real activity and inflation through a confidence channel, as they …

Persistent link: https://www.econbiz.de/10012294890

Pass-through of cost-push shocks

Gödl-Hanisch, Isabel; Menkhoff, Manuel - 2023

This paper examines the pass-through of cost-push shocks to customers at a granular level. Using unique firm-level survey data, we document five facts about pass-through across firms, sectors, and over time. We highlight a new channel relevant for pass-through: beliefs about the expected...

Persistent link: https://www.econbiz.de/10014306740