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Optimal monetary policy under commitment with a zero bound on nominal interest rates

Adam, Klaus; Billi, Roberto M. - 2004

We determine optimal monetary policy under commitment in a forwardlooking New Keynesian model when nominal interest …

Persistent link: https://www.econbiz.de/10011604423

A speed limit monetary policy rule for the euro area

Stracca, Livio - 2006

policy rules and of the optimal unconstrained rule under commitment. The study reaches two main conclusions. First, inflation … the performance of the optimal rule under commitment. The optimal speed limit rule is also characterised by super …

Persistent link: https://www.econbiz.de/10011604646

Quantifying and sustaining welfare gains from monetary commitment

Levine, Paul; McAdam, Peter; Pearlman, Joseph G. - 2007

The objectives of this paper are: first, to quantify the stabilization welfare gains from commitment; second, to … examine how commitment to an optimal rule can be sustained as an equilibrium and third, to find a simple interest rate rule … that closely approximates the optimal commitment one. We utilize an influential empirical micro-founded DSGE model, the …

Persistent link: https://www.econbiz.de/10011604755

Monetary policy and the drifting natural rate of interest

Daudignon, Sandra; Tristani, Oreste - 2023

Empirical analyses starting from Laubach and Williams (2003) find that the natural rate of interest is not constant in the long-run. This paper studies the optimal response to stochastic changes of the long-run natural rate in a suitably modified version of the new Keynesian model. We show that,...

Persistent link: https://www.econbiz.de/10014374476

Real effects of credit supply shocks: Evidence from Danish banks, firms, and workers

Hviid, Simon Juul; Schroeder, Christofer - 2024

Contractions in credit supply can lead firms to reduce their level of employment, yet little is known about how these shocks affect the composition of firms' employees and outcomes at the worker level. This paper investigates how bank distress affects credit provision and its effects on...

Persistent link: https://www.econbiz.de/10015199455

HANK faces unemployment

Consolo, Agostino; Hänsel, Matthias - 2024

Since the advent of Heterogeneous Agent New Keynesian (HANK) models, countercyclical unemployment risk has been deemed an important amplification mechanism for business cycles shocks. Yet, the aggregate effects of such "unemployment fears" are hard to pin down. We thus revisit this issue in the...

Persistent link: https://www.econbiz.de/10015199489

Going NUTS: The regional impact of extreme climate events over the medium term

Usman, Sehrish; González-Torres, Guzmán; Parker, Miles - 2024

The projected increase in extreme climate events in the coming decades is likely to exacerbate the existing productivity and demographic challenges facing Europe. We study the dynamic, medium-run macroeconomic effects of heatwaves, droughts and floods in 1160 EU regions through the lens of a...

Persistent link: https://www.econbiz.de/10015199539

Did COVID-19 induce a reallocation wave?

Consolo, Agostino; Petroulakis, Filippos - 2022

Recent research has argued that the COVID-19 shock has also brought about a reallocation shock. We examine the evidence for such an occurrence in the United States, taking a broad perspective. We first consider micro data from CPS and JOLTS; there is no noticeable uptick in occupation or sector...

Persistent link: https://www.econbiz.de/10014278225

Explaining deviations from Okun's law

Foroni, Claudia; Furlanetto, Francesco - 2022

Despite its stability over time, as for any statistical relationship, Okun's law is subject to deviations that can be large at times. In this paper, we provide a mapping between residuals in Okun's regressions and structural shocks identified with a SVAR model by inspecting how unemployment...

Persistent link: https://www.econbiz.de/10014278258

Lower for longer under endogenous technology growth

Schmöller, Michaela; Spitzer, Martin - 2022

This paper studies monetary policy strategies under endogenous technology dynamics and low r. Endogenous growth strengthens the gains from make-up strategies relative to inflation targeting, especially if policy space is reduced. This result is due to the long-run non-neutrality of money and the...

Persistent link: https://www.econbiz.de/10014278361