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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

The link between interest rates and exchange rates: do contractionary depreciations make a difference?

Sánchez, Marcelo - 2005

The link between exchange rates and interest rates features prominently in the theoretical and empirical literature on small open economies. This paper revisits this relationship using a simple model that incorporates the role of exchange rate pass-through into domestic prices and distinguishes...

Persistent link: https://www.econbiz.de/10011604594

Near-rational exuberance

Bullard, James; Evans, George W.; Honkapohja, Seppo - 2005

We study how the use of judgement or “add-factors” in macroeconomic forecasting may disturb the set of equilibrium outcomes when agents learn using recursive methods. We isolate conditions under which new phenomena, which we call exuberance equilibria, can exist in standard macroeconomic...

Persistent link: https://www.econbiz.de/10011604601

The role of real wage rigidity and labor market frictions for unemployment and inflation dynamics

Christoffel, Kai; Linzert, Tobias - 2005

In this paper we incorporate a labor market with matching frictions and wage rigidities into the New Keynesian business cycle model. In particular, we analyze the effect of a monetary policy shock and investigate how labor market frictions affect the transmission process of monetary policy. The...

Persistent link: https://www.econbiz.de/10011604602

When did unsystematic monetary policy have an effect on inflation?

Mojon, Benoît - 2005

An important stylized fact to emerge from the VAR estimates is that exogenous monetary policy shocks (also labelled unsystematic monetary policy) have a delayed, persistent, hump shaped effect on inflation. I argue that this empirical pattern is fragile. In particular it disappears when one...

Persistent link: https://www.econbiz.de/10011604605

Debt stabilizing fiscal rules

Michel, Philippe; von Thadden, Leopold; Vidal, Jean-Pierre - 2006

Unstable government debt dynamics can typically be corrected by various fiscal instruments, like appropriate adjustments in government spending, public transfers, or taxes. This paper investigates properties of state-contingent debt targeting rules which link stabilizing budgetary adjustments...

Persistent link: https://www.econbiz.de/10011604622

Distortionary taxation, debt, and the price level

Schabert, Andreas; von Thadden, Leopold - 2006

the sequences of taxes, debt, and interest rates. If, for example, fiscal policy runs a balanced budget the central bank …

Persistent link: https://www.econbiz.de/10011604623