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Cost-Benefit Analysis of Leaning Against the Wind

Svensson, Lars E. O. - 2016

A simple and transparent framework for cost-benefit analysis of \leaning against the wind" (LAW), that is, tighter monetary policy for financial-stability purposes, is presented. LAW has obvious costs in the form of a weaker economy if no crisis occurs and possible benefits in the form of a...

Persistent link: https://www.econbiz.de/10013000534

Leaning Against the Wind : The Role of Different Assumptions About the Costs

Svensson, Lars E. O. - 2017

“Leaning against the wind” (LAW), that is, tighter monetary policy for financial-stability purposes, has costs in terms of a weaker economy with higher unemployment and lower inflation and possible benefits from a lower probability or magnitude of a (financial) crisis. A first obvious cost...

Persistent link: https://www.econbiz.de/10012948449

Target Zones and Interest Rate Variability

Svensson, Lars E. O. - 2008

The trade-off between interest rate variability and the width of an exchange rate target zone is examined, using the regulated Brownian motion model of target zones. It is shown that for narrow exchange rate bands, and for reasonable parameter values, the interest rate differential's asymptotic...

Persistent link: https://www.econbiz.de/10012774524

Estimating and Interpreting Forward Interest Rates : Sweden 1992 - 1994

Svensson, Lars E. O. - 2006

The use of forward interest rates as a monetary policy indicator is demonstrated, using Sweden 1992-1994 as an example. The forward rates are interpreted as indicating market expectations of the time- path of future interest rates, future inflation rates, and future currency depreciation rates....

Persistent link: https://www.econbiz.de/10012783966

Forward Guidance

Svensson, Lars E. O. - 2014

Forward guidance about future policy settings, in the form of a published policy-rate path, has for many years been a natural part of normal monetary policy for several central banks, including the Reserve Bank of New Zealand and the Swedish Riksbank. More recently, the Federal Reserve has...

Persistent link: https://www.econbiz.de/10013039629

The Zero Bound in an Open Economy : A Foolproof Way of Escaping from a Liquidity Trap

Svensson, Lars E. O. - 2021

The paper examines the transmission mechanism of monetary policy in an open economy with and without a binding zero bound on nominal interest rates. In particular, a foolproof way of escaping from a liquidity trap is presented, consisting of a price-level target path, a devaluation of the...

Persistent link: https://www.econbiz.de/10013210676

Monetary Policy with Flexible Exchange Rates and Forward Interest Rates as Indicators

Svensson, Lars E. O. - 2021

In the new situation with flexible exchange rates, monetary policy in Europe will have to rely more on indicators than previously under fixed rates. One of the potential indicators, the forward interest rate curve, can be used to indicate market expectations of the time-paths of future short...

Persistent link: https://www.econbiz.de/10013214576

Money and Inflation in the Euro Area : A Case for Monetary Indicators?

Gerlach, Stefan; Svensson, Lars E. O. - 2021

This paper studies the relationship between inflation, output, money and interest rates in the euro area, using data spanning 1980 2000. The P* model is shown to have considerable empirical support. Thus, the price gap' or, equivalently, the real money gap' (the gap between current real balances...

Persistent link: https://www.econbiz.de/10013312477

The Economics of Non-Marital Childbearing and the “Marriage Premium for Children”

Kearney, Melissa S. - 2017

A large literature exists on the impact of family structure on children's outcomes, typically focusing on average … children of married parents. We propose that the gains to marriage from a child's perspective depend on a mother's own level of … school completion or avoiding poverty at age 25, the “marriage premium for children” is highest for children of mothers with …

Persistent link: https://www.econbiz.de/10012960786

The Impact of Children's Public Health Insurance Expansions on Educational Outcomes

Levine, Phillip B. - 2010

This paper examines the impact of public health insurance expansions through both Medicaid and SCHIP on children … time and across ages in children's health insurance eligibility. Using this approach, we find that test scores in reading …, but not math, increased for those children affected at birth by increased health insurance eligibility. A 50 percentage …

Persistent link: https://www.econbiz.de/10012757955