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Persistent link: https://www.econbiz.de/10012505395
The links between real and nominal bond risk premia and macroeconomic dynamics are explored analytically and quantitatively in a model with nominal rigidities and monetary policy. The interest-rate policy rule becomes a restriction linking real and nominal risk premia through endogenous...
Persistent link: https://www.econbiz.de/10013032008
Persistent link: https://www.econbiz.de/10009521662
The bond yield dynamics implied by a welfare-maximizing monetary policy and its credibility are explored in general equilibrium. Credibility is captured by a regime change from discretion to commitment. The policy determines the optimal output and inflation responses to a source of inflation...
Persistent link: https://www.econbiz.de/10013143085