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Money demand and macroeconomic stability revisited

Schabert, Andreas; Stoltenberg, Christian - 2005

This paper examines how money demand induced real balance effects contribute to the determination of the price level, as suggested by Patinkin (1949,1965), and if they affect conditions for local equilibrium uniqueness and stability. There exists a unique price level sequence that is consistent...

Persistent link: https://www.econbiz.de/10011604504

The performance and robustness of interest-rate rules in models of the euro area

Adalid, Ramón; Coenen, Günter; McAdam, Peter; … - 2005

In this paper, we examine the performance and robustness of optimised interest-rate rules in four models of the euro area which differ considerably in terms of size, degree of aggregation, relevance of forward-looking behavioural elements and adherence to micro-foundations. Our findings are...

Persistent link: https://www.econbiz.de/10011604525

Persistence and nominal inertia in a generalized Taylor economy: how longer contracts dominate shorter contracts

Dixon, Huw; Kara, Engin - 2005

In this paper we develop the Generalized Taylor Economy (GTE) in which there are many sectors with overlapping contracts of different lengths. In economies with the same average contract length, monetary shocks will be more persistent when longer contracts are present. We are able to solve the...

Persistent link: https://www.econbiz.de/10011604535

Fleshing out the monetary transmission mechanism: output composition and the role of financial frictions

Meier, André; Müller, Gernot J. - 2005

Financial frictions affect the way in which different components of GDP respond to a monetary policy shock. We embed the financial accelerator of Bernanke, Gertler and Gilchrist (1999) into a medium-scale Dynamic General Equilibrium model and evaluate the relative importance of financial...

Persistent link: https://www.econbiz.de/10011604546

Fiscal and monetary rules for a currency union

Ferrero, Andrea - 2005

This paper addresses the question of the joint conduct of fiscal and monetary policy in a currency union. The problem is studied using a two-country DSGE framework with staggered price setting, monopolistic competition in the goods market, distortionary taxation and nominal debt. The two...

Persistent link: https://www.econbiz.de/10011604548

Does government spending crowd in private consumption? Theory and empirical evidence for the euro area

Coenen, Günter; Straub, Roland - 2005

In this paper, we revisit the effects of government spending shocks on private consumption within an estimated New-Keynesian DSGE model of the euro area featuring non-Ricardian households. Employing Bayesian inference methods, we show that the presence of non-Ricardian households is in general...

Persistent link: https://www.econbiz.de/10011604559

Gains from international monetary policy coordination: does it pay to be different?

Liu, Zheng; Pappa, Evi - 2005

This paper presents a new argument for international monetary policy coordination based on considerations of structural asymmetries across countries. In a two-country world with a traded and a non-traded sector in each country, optimal independent monetary policy cannot replicate the...

Persistent link: https://www.econbiz.de/10011604560

Discretionary policy, multiple equilibria, and monetary instruments

Schabert, Andreas - 2005

This paper examines monetary policy implementation in a sticky price model. The central bank’s plan under discretionary … small. The central bank can then implement stable history dependent equilibrium sequences that are consistent with its plan … that the central bank’s plan can uniquely be implemented in a history dependent way by money injections, whereas inertial …

Persistent link: https://www.econbiz.de/10011604579

Inflation persistence and monetary policy design: an overview

Levin, Andrew T.; Moessner, Richhild - 2005

How monetary policy should be set optimally when the structure of the economy exhibits inflation persistence is an important question for policy makers. This paper provides an overview of the implications of inflation persistence for the design of monetary policy.

Persistent link: https://www.econbiz.de/10011604585

Optimal discretionary policy and uncertainty about inflation persistence

Moessner, Richhild - 2005

in the presence of uncertainty about inflation inertia, depending on the form of the central bank’s objective function …

Persistent link: https://www.econbiz.de/10011604586