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recognition to the intertemporal nature of households' saving decisions. Like traditional IS-LM, however, the optimizing version … tends to understate the value of money as an indicator for monetary policy. …
Persistent link: https://www.econbiz.de/10005707651
Persistent link: https://www.econbiz.de/10001982872
rate. Money’s role in monetary policy has been tertiary, at best. Indeed, several influential economists have suggested … that money is irrelevant for monetary policy. They suggest that central banks can control inflation by (i) controlling a … rate in order to exert greater control over longer-term rates. I offer an alternative perspective: namely, that money is …
Persistent link: https://www.econbiz.de/10010558739
Empirical work in macroeconomics is plagued by small sample size and large idiosyncratic variation. This problem is especially severe in the case of transition economies. We use a mixed estimation method incorporating information from OECD country data to estimate the parameters of a...
Persistent link: https://www.econbiz.de/10005490941
Many recent studies in macroeconomics have focused on the estimation of DSGE models using a system of loglinear approximations to the models' nonlinear equilibrium conditions. The term macroeconometric equivalence encapsulates the idea that estimates using aggregate data based on first-order...
Persistent link: https://www.econbiz.de/10005490955
This paper proposes a solution method to solve linear difference models with lagged expectations. Variables with lagged expectations expand the model's state space greatly when N is large; and getting the system into a canonical form solvable by the traditional methods involves substantial manual...
Persistent link: https://www.econbiz.de/10005490983
We study macroeconomic systems with forward-looking private sector agents and a monetary authority that is trying to control the economy through the use of a linear policy feedback rule. A typical finding in the burgeoning literature in this area is that policymakers should be relatively...
Persistent link: https://www.econbiz.de/10005352838
In this paper, we present a dynamic optimizing model that allows explicitly for imperfect substitutability between different financial assets. This is specified in a manner which captures Tobin's (1969) view that an expansion of one asset's supply affects both the yield on that asset and the...
Persistent link: https://www.econbiz.de/10005352930
determined by steady-state money growth. Woodford instead argues that the intercept term in the monetary authority's interest …, according to which it is appropriate to regard steady-state inflation as determined by steady-state money growth. The argument … the money growth rate. …
Persistent link: https://www.econbiz.de/10005352999
the origin of the aggregate volatility reduction. We show that states with relatively high concentrations in the durable-goods …
Persistent link: https://www.econbiz.de/10005360567