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Author : Brian Sack
Publisher :
ISBN 13 :
Total Pages : 54 pages
Book Rating : 4.E/5 ( download)
Download or read book Interest-rate Smoothing and Optimal Monetary Policy written by Brian Sack and published by . This book was released on 1999 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Andreas Lehnert
Publisher :
ISBN 13 :
Total Pages : 42 pages
Book Rating : 4.:/5 (44 download)
Download or read book Interest-rate Smoothing and Optimal Monetary Policy written by Andreas Lehnert and published by . This book was released on 1999 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Sanjay K. Chugh
Publisher :
ISBN 13 :
Total Pages : 35 pages
Book Rating : 4.:/5 (249 download)
Download or read book Does Monetary Policy Keep Up with the Joneses? written by Sanjay K. Chugh and published by . This book was released on 2004 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Luisa Corrado
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (881 download)
Download or read book Persistent Habits, Optimal Monetary Policy Inertia and Interest Rate Smoothing written by Luisa Corrado and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Sergio Rebelo
Publisher :
ISBN 13 :
Total Pages : 44 pages
Book Rating : 4.3/5 ( download)
Download or read book On the Optimality of Interest Rate Smoothing written by Sergio Rebelo and published by . This book was released on 1997 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies some continuous-time cash-in-advance models in which interest rate smoothing is optimal. We consider both deterministic and stochastic models. In the stochastic case we obtain two results of independent interest: (i) we study what is, to our knowledge, the only version of the neoclassical model under uncertainty that can be solved in closed form in continuous time; and (ii) we show how to characterize the competitive equilibrium of a stochastic continuous time model that cannot be computed by solving a planning problem. We also discuss the scope for monetary policy to improve welfare in an economy with a suboptimal real competitive equilibrium, focusing on the particular example of an economy with externalities.
Author : Woon Gyu Choi
Publisher : International Monetary Fund
ISBN 13 :
Total Pages : 40 pages
Book Rating : 4.:/5 (318 download)
Download or read book Optimal Monetary Policy in a Small Open Economy with Habit Formation and Nominal Rigidities written by Woon Gyu Choi and published by International Monetary Fund. This book was released on 2003 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: Introducing habit formation into an open economy macroeconomic model with price stickiness, we examine the characteristics of an optimal monetary policy. We find that, first, the optimal policy rule entails interest rate smoothing and responds to the lagged values of the foreign interest rate and domestic technology shocks as well as their current values. Second, habit formation enriches the dynamics of the economy with a persistent, hump-shaped response of consumption to shocks. Finally, when habit formation does matter, the optimal policy rule achieves a greater welfare improvement over alternative policy rules by achieving lower macroeconomic variability.
Author : Sven R. Skallsjö
Publisher :
ISBN 13 :
Total Pages : 47 pages
Book Rating : 4.:/5 (129 download)
Download or read book Optimal Monetary Policy, the Zero Bound and the Term Structure of Interest Rates written by Sven R. Skallsjö and published by . This book was released on 2004 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper studies optimal monetary policy and its implication for the term structure of interest rates when the nominal short rate is bounded at zero. We state the monetary authority's optimization problem in continuous time according to two specifications, interest rate stabilization and interest rate smoothing. For the former the optimization problem is solved analytically, while numerical procedures are adopted for the latter. The paper then turns to study implications for the term structure of interest rates under risk-neutrality. Term structure equations are solved numerically and implications for yield curves and yield volatility curves are discussed. Data for a low-interest rate country like Japan for 1996-2003 exhibits s-shaped yield curves and yield volatility curves. According to our results this shape is consistent with a smoothing objective for the short rate.
Author : John B. Taylor
Publisher : University of Chicago Press
ISBN 13 : 0226791262
Total Pages : 460 pages
Book Rating : 4.2/5 (267 download)
Download or read book Monetary Policy Rules written by John B. Taylor and published by University of Chicago Press. This book was released on 2007-12-01 with total page 460 pages. Available in PDF, EPUB and Kindle. Book excerpt: This timely volume presents the latest thinking on the monetary policy rules and seeks to determine just what types of rules and policy guidelines function best. A unique cooperative research effort that allowed contributors to evaluate different policy rules using their own specific approaches, this collection presents their striking findings on the potential response of interest rates to an array of variables, including alterations in the rates of inflation, unemployment, and exchange. Monetary Policy Rules illustrates that simple policy rules are more robust and more efficient than complex rules with multiple variables. A state-of-the-art appraisal of the fundamental issues facing the Federal Reserve Board and other central banks, Monetary Policy Rules is essential reading for economic analysts and policymakers alike.
Author : Richard Dennis
Publisher :
ISBN 13 :
Total Pages : 42 pages
Book Rating : 4.:/5 (318 download)
Download or read book The Policy Preferences of the US Federal Reserve written by Richard Dennis and published by . This book was released on 2001 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Glenn D. Rudebusch
Publisher :
ISBN 13 :
Total Pages : 42 pages
Book Rating : 4.:/5 (318 download)
Download or read book Term Structure Evidence on Interest Rate Smoothing and Monetary Policy Inertia written by Glenn D. Rudebusch and published by . This book was released on 2001 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Davide Debortoli
Publisher : International Monetary Fund
ISBN 13 : 1484311752
Total Pages : 56 pages
Book Rating : 4.4/5 (843 download)
Download or read book Designing a Simple Loss Function for Central Banks written by Davide Debortoli and published by International Monetary Fund. This book was released on 2017-07-21 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: Yes, it makes a lot of sense. This paper studies how to design simple loss functions for central banks, as parsimonious approximations to social welfare. We show, both analytically and quantitatively, that simple loss functions should feature a high weight on measures of economic activity, sometimes even larger than the weight on inflation. Two main factors drive our result. First, stabilizing economic activity also stabilizes other welfare relevant variables. Second, the estimated model features mitigated inflation distortions due to a low elasticity of substitution between monopolistic goods and a low interest rate sensitivity of demand. The result holds up in the presence of measurement errors, with large shocks that generate a trade-off between stabilizing inflation and resource utilization, and also when ensuring a low probability of hitting the zero lower bound on interest rates.
Author : Matthew B. Canzoneri
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (254 download)
Download or read book The Information Content of the Interest Rate and Optimal Monetary Policy written by Matthew B. Canzoneri and published by . This book was released on 1981 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Stephanie Schmitt-Grohé
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (12 download)
Download or read book Optimal Simple and Implementable Monetary and Fiscal Rules written by Stephanie Schmitt-Grohé and published by . This book was released on 2006 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper computes welfare-maximizing monetary and fiscal policy rules in a real business cycle model augmented with sticky prices, a demand for money, taxation, and stochastic government consumption. We consider simple feedback rules whereby the nominal interest rate is set as a function of output and inflation, and taxes are set as a function of total government liabilities. We implement a second-order accurate solution to the model. Our main findings are: First, the size of the inflation coefficient in the interest-rate rule plays a minor role for welfare. It matters only insofar as it affects the determinacy of equilibrium. Second, optimal monetary policy features a muted response to output. More importantly, interest rate rules that feature a positive response to output can lead to significant welfare losses. Third, the welfare gains from interest-rate smoothing are negligible. Fourth, optimal fiscal policy is passive. Finally, the optimal monetary and fiscal rule combination attains virtually the same level of welfare as the Ramsey optimal policy.
Author : Jonathan Benchimol
Publisher : International Monetary Fund
ISBN 13 : 1498324584
Total Pages : 52 pages
Book Rating : 4.4/5 (983 download)
Download or read book Optimal Monetary Policy Under Bounded Rationality written by Jonathan Benchimol and published by International Monetary Fund. This book was released on 2019-08-02 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: The form of bounded rationality characterizing the representative agent is key in the choice of the optimal monetary policy regime. While inflation targeting prevails for myopia that distorts agents' inflation expectations, price level targeting emerges as the optimal policy under myopia regarding the output gap, revenue, or interest rate. To the extent that bygones are not bygones under price level targeting, rational inflation expectations is a minimal condition for optimality in a behavioral world. Instrument rules implementation of this optimal policy is shown to be infeasible, questioning the ability of simple rules à la Taylor (1993) to assist the conduct of monetary policy. Bounded rationality is not necessarily associated with welfare losses.
Author : Pau Rabanal
Publisher : International Monetary Fund
ISBN 13 :
Total Pages : 32 pages
Book Rating : 4.:/5 (318 download)
Download or read book Monetary Policy Rules and the U.S. Business Cycle written by Pau Rabanal and published by International Monetary Fund. This book was released on 2004-09 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper estimates Taylor-type interest rates for the United States allowing for both time and state dependence. It provides evidence that the coefficients of the Taylor rule change significantly over time, and that the behavior of the Federal Reserve over the cycle can be explained using a two-state switching regime model. During expansions, the Federal Reserve follows a rule that can be characterized as inflation targeting with a high degree of interest rate smoothing. During recessions, the Federal Reserve targets output growth and conducts policy in a more active manner. The implications of conducting this type of policy are analyzed in a small scale new Keynesian model.
Author : Brian Sack
Publisher :
ISBN 13 :
Total Pages : 46 pages
Book Rating : 4.E/5 ( download)
Download or read book Uncertainty, Learning, and Gradual Monetary Policy written by Brian Sack and published by . This book was released on 1998 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Michael Woodford
Publisher :
ISBN 13 :
Total Pages : 92 pages
Book Rating : 4.:/5 (423 download)
Download or read book Optimal Monetary Policy Inertia written by Michael Woodford and published by . This book was released on 1999 with total page 92 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper considers the desirability of the observed tendency of central banks to adjust interest rates only gradually in response to changes in economic conditions. It shows, in the context of a simple model of optimizing private-sector behavior, that such inertial policy can be optimal. The reason is that small but persistent changes in short-term interest rates in response to shocks allow a larger effect of monetary policy on long rates and hence upon aggregate demand, for a given degree of overall interest-rate variability. The paper also considers two ways of achieving the desirable degree of inertia in the equilibrium responses to shocks. One is by assignment of a loss function that penalizes squared interest-rate changes (despite the fact that interest-rate changes do not affect the true social objective) to a central bank that is then expected to use discretion in the pursuit of the goal. The second is through commitment to an explicit instrument rule, a generalization of the Taylor rule' in which the funds rate is an increasing function of the lagged funds rate, as in estimated Fed reaction functions
