Similar Search Results

Bullard, James; Evans, George W.; Honkapohja, Seppo - 2005

We study how the use of judgement or “add-factors” in macroeconomic forecasting may disturb the set of equilibrium outcomes when agents learn using recursive methods. We isolate conditions under which new phenomena, which we call exuberance equilibria, can exist in standard macroeconomic...

Persistent link: https://www.econbiz.de/10011604601

Expectations and the stability problem for optimal monetary policies

Honkapohja, Seppo; Evans, George W. - 2000

Eine auf den Fundamentaldaten beruhende Regelbindung der Geldpolitik ohne Selbstverpflichtung, die bei vollkommen … geeigneter Weise in die optimale Geldpolitik einbezogen werden. Diese eindeutige Schlußfolgerung gilt auch dann, wenn sich der … wichtig es ist, die Geldpolitik angemessen zu gestalten und dabei nicht nur die Fundamentaldaten, sondern auch direkt die …

Persistent link: https://www.econbiz.de/10010295698

Performance of monetary policy with internal central bank forecasting

Honkapohja, Seppo; Mitra, Kaushik - 2002

Recent models of monetary policy have analyzed the desirability of different optimal and ad hoc interest rules under the restrictive assumption that forecasts of the private sector and the central bank are homogenous. In this paper, we study the implications of heterogeneity in forecasts of the...

Persistent link: https://www.econbiz.de/10011604173

Liquidity Traps, Learning and Stagnation

Evans, George W.; Guse, Eran; Honkapohja, Seppo - 2007

We examine global economic dynamics under learning in a New Keynesian model in which the interest-rate rule is subject to the zero lower bound. Under normal monetary and fiscal policy, the intended steady state is locally but not globally stable. Large pessimistic shocks to expectations can lead...

Persistent link: https://www.econbiz.de/10010260581

Policy interaction, expectations, and the liquidity trap

Evans, George W.; Honkapohja, Seppo - 2003

The authors consider inflation and government debt dynamics when monetary policy employs a global interest rate rule and private agents forecast using adaptive learning. Because of the zero lower bound on interest rates, active interest rate rules are known to imply the existence of a second,...

Persistent link: https://www.econbiz.de/10010397381

Discussion of Preston, "Learning about monetary policy rules when long-horizon expectations matter"

Honkapohja, Seppo - 2003

The design of interest rate rules for conducting monetary policy have recently been examined for two key concerns. The first issue is determinacy of equilibria. Indeterminacy (multiplicity of stationary rational expectations equilibria) is a concern in models of monopolistic competition and...

Persistent link: https://www.econbiz.de/10010397552

Performance of monetary policy with internal central bank forecasting

Honkapohja, Seppo; Mitra, Kaushik - 2002

Recent models of monetary policy have analysed the desirability of different optimal and ad hoc interest-rate rules under the restrictive assumption that forecasts of the private sector and central bank are homogeneous.In this paper, we study from a learning perspective the implications of...

Persistent link: https://www.econbiz.de/10012147838

Friedman's money supply rule vs optimal interest rate policy

Evans, George W.; Honkapohja, Seppo - 2003

Using New Keynesian models, we compare Friedman's k-percent money supply rule to optimal interest rate setting, with respect to determinacy, stability under learning and optimality.We first review the recent literature.Open-loop interest rate rules are subject to indeterminacy and instability...

Persistent link: https://www.econbiz.de/10012147874

Liquidity trap and expectation dynamics: Fiscal stimulus or fiscal austerity?

Benhabib, Jess; Evans, George W.; Honkapohja, Seppo - 2012

We examine global dynamics under infinite-horizon learning in New Keynesian models where the interest-rate rule is subject to the zero lower bound. As in Evans, Guse and Honkapohja (2008), the intended steady state is locally but not globally stable. Unstable deflationary paths emerge after...

Persistent link: https://www.econbiz.de/10012148161

Targeting nominal GDP or prices: Guidance and expectation dynamics

Mitra, Kaushik; Honkapohja, Seppo - 2014

We examine global dynamics under infinite-horizon learning in New Keynesian models where monetary policy practices either price level or nominal GDP targeting and compare these regimes to inflation targeting. These interest-rate rules are subject to the zero lower bound. Robustness of the three...

Persistent link: https://www.econbiz.de/10012148210