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In macroeconomic models, the level of price dispersion - which is typically approximated through its relationship with inflation - is a central determinant of welfare, the cost of business cycles, the optimal rate of inflation, and the tradeoff between inflation and output stability. While the...
Persistent link: https://www.econbiz.de/10011460695
This document analyzes inflation, exchange rate, interest rate, and GDP growth forecasts from the monthly Survey of Specialists in Economics from the Private Sector, maintained by Banco de M'exico. The study concentrates on the mean across forecasters for the period from January 1995 to April...
Persistent link: https://www.econbiz.de/10010322588
The gap between market rent and the price of shelter was 6.6 percent larger in December 2023 relative to December 2019. Because shelter prices comprise 36 percent of the Consumer Price Index and therefore influence monetary policy decisions, it is vital to understand the pass-through of this...
Persistent link: https://www.econbiz.de/10015054176
Monetary policy in India has moved towards an increasingly flexible exchange rate regime without any explicit framework for an alternative nominal anchor. The failure of monetary policy to anchor inflationary expectations of agents, coupled with negative supply shocks has kept inflation above...
Persistent link: https://www.econbiz.de/10010740605
The Phillips curve framework, which includes the output gap and natural rate hypothesis, plays a central role in the canonical macroeconomic model used in analyses of monetary policy. It is now well understood that real-time data must be used to evaluate historical monetary policy. We believe...
Persistent link: https://www.econbiz.de/10010616474
We develop a optimal rules-based interpretation of the 'three pillars macroeconomic policy framework': a combination of a freely floating exchange rate, an explict target for inflation, and a mechanism than ensures a stable government debt-GDP ratio around a specified long run. We show how such...
Persistent link: https://www.econbiz.de/10009391675
We develop a closed-economy DSGE model of the Indian economy and estimate it by Bayesian Maximum Likelihood methods using Dynare. We build up in stages to a model with a number of features important for emerging economies in general and the Indian economy in particular: a large proportion of...
Persistent link: https://www.econbiz.de/10009391678
We first develop a two-bloc model of an emerging open economy interacting with the rest of the world calibrated using Indian and US data. The model features a financial accelerator and is suitable for examining the effects of financial stress on the real economy. Three variants of the model are...
Persistent link: https://www.econbiz.de/10008461987
The past forty years or so has seen a remarkable transformation in macro-models used by central banks, policymakers and forecasting bodies. This papers describes this transformation from reduced-form behavioural equations estimated separately, through to contemporary micro-founded dynamic...
Persistent link: https://www.econbiz.de/10008461989
We analyze the relationship between uncertainty and economic growth expectations in Mexico through the Growth at Risk methodology. Our analysis consists of two stages: first, we estimate a quantile regression of annual output growth conditional on lagged values of a measure of macroeconomic...
Persistent link: https://www.econbiz.de/10014541016