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Monetary policy and inflationary shocks under imperfect credibility

Darracq Pariès, Matthieu; Moyen, Stéphane - 2009

imperfect credibility and weak anchoring of long-term expectations. Within a medium-scale DSGE model, we introduce through a … credibility could amount to 0.25 pp of output gap standard deviation. -- Monetary policy ; Imperfect credibility ; Signal …

Persistent link: https://www.econbiz.de/10003867037

Living Up to Expectations : Central Bank Credibility, the Effectiveness of Forward Guidance, and Inflation Dynamics Post-Global Financial Crisis

Cole, Stephen J.; Martínez-García, Enrique; Sims, Eric R. - National Bureau of Economic Research - 2023

This paper studies the effectiveness of forward guidance when central banks have imperfect credibility. Exploiting … expectations. In our model, the key parameter that aggregates heterogeneous expectations captures the central bank's credibility …, and other major advanced economies have similar levels of credibility (albeit far from full credibility); however, Japan …

Persistent link: https://www.econbiz.de/10014421202

Trend Inflation, Wage Indexation, and Determinacy in the U.S.

Ascari, Guido; Branzoli, Nicola; Castelnuovo, Efrem - 2011

We combine an estimated monetary policy rule featuring time-varying trend inflation and stochastic coefficients with a medium scale New Keynesian framework calibrated on the U.S. economy. We find the impact of variations in trend inflation on the likelihood of equilibrium determinacy to be both...

Persistent link: https://www.econbiz.de/10010343856

Adjustment is much slower than you think

Caballero, Ricardo J.; Engel, Eduardo - 2003

In most instances, the dynamic response of monetary and other policies to shocks is infrequent and lumpy. The same holds for the microeconomic response of some of the most important economic variables, such as investment, labor demand, and prices. We show that the standard practice of estimating...

Persistent link: https://www.econbiz.de/10011609531

Shocks and frictions in US business cycles : a Bayesian DSGE approach

Smets, Frank; Wouters, Rafael - 2007

Using a Bayesian likelihood approach, we estimate a dynamic stochastic general equilibrium model for the US economy using seven macro-economic time series. The model incorporates many types of real and nominal frictions and seven types of structural shocks. We show that this model is able to...

Persistent link: https://www.econbiz.de/10011618212

A reappraisal of the inflation-unemployment tradeoff

Karanassou, Marika; Sala, Héctor; Snower, Dennis J. - In: European journal of political economy 21 (2005) 1, pp. 1-32

This paper offers a reappraisal of the inflation-unemployment tradeoff, based on ?frictional growth,? describing the interplay between nominal frictions and money growth. When the money supply grows in the presence of price inertia (due to staggered wage contracts with time discounting), the...

Persistent link: https://www.econbiz.de/10010313770

A reappraisal of the inflation-unemployment tradeoff

Karanassou, Marika; Sala, Héctor; Snower, Dennis J. - 2002

This paper offers a reappraisal of the inflation-unemployment tradeoff, based on ?frictional growth? describing the interplay between nominal frictions and money growth. When the money supply grows in the presence of price inertia (due to staggered wage contracts with time discounting), the...

Persistent link: https://www.econbiz.de/10010276419

Adjustment Is Much Slower Than You Think

Caballero, Ricardo J.; Engel, Eduardo M.R.A. - 2003

Persistent link: https://www.econbiz.de/10010369179

Shocks and Frictions in US Business Cycles: a Bayesian DSGE Approach

Smets, Frank; Wouters, Raf - 2007

Persistent link: https://www.econbiz.de/10011506630

Real-time model uncertainty in the United States: the Fed from 1996-2003

Tetlow, Robert J.; Ironside, Brian - 2006

We study 30 vintages of FRB/US, the principal macro model used by the Federal Reserve Board staff for forecasting and policy analysis. To do this, we exploit archives of the model code, coefficients, baseline databases and stochastic shock sets stored after each FOMC meeting from the model’s...

Persistent link: https://www.econbiz.de/10011604656