Download or read book The Asymmetric Effects of Monetary Policy on Job Creation and Destruction written by Mr.Pietro Garibaldi and published by International Monetary Fund. This book was released on 1997-04-01 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper presents theory and evidence on the asymmetric effects of monetary policy on job creation and job destruction. First, it solves a dynamic matching model and it shows how interest rate changes result in an asymmetric response of job creation and destruction. Second, it looks at how changes in the federal fund rate affect gross job flows in the U.S. manufacturing industry, and it finds evidence of asymmetry. Tight policy increases job destruction and reduces net employment changes. Conversely, easy policy appears ineffective in stimulating job creation.
Download or read book Asymmetric Effects of Monetary Policy Shocks written by Kevalin Wangpichayasuk and published by . This book was released on 2001 with total page 206 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Asymmetric Effects of Monetary Policy Shocks on the Economic Performance written by Volkan Ulke and published by . This book was released on 2015 with total page 16 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates asymmetric effects of monetary policy shocks on the macroeconomic variables: exchange rate, output and inflation for an emerging economy, Turkey, by using monthly data between 1990 and 2014. The innovative nonlinear vector autoregressive model of Kilian and Vigfusson (2011), which allows us to observe the effect of different stance (tight or loose) and different size (small or large) of monetary policy action, is employed. The empirical evidence reveals that tight monetary policy, which is captured with a positive shock to interest rate, decrease the exchange rate, output and prices as the economic theory suggest. The effects of the loose monetary policy, which is captured with a negative shock to interest rate, have opposite an effect on these variables. However, the effects of the loose monetary policy are less than the effect of the tight monetary policy the easy monetary policy shocks are less effective than the tight monetary policy shocks. Moreover, as the magnitude of shock increases, the difference between the effects of tight and loose monetary policy policies increase.
Download or read book Asymmetric Effects of Monetary Policy written by Tiff Macklem and published by . This book was released on 1998 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recent empirical studies examining the asymmetric effects of monetary shocks on economic activity do not systematically control for the non-monetary sources of fluctuations as well as the endogenous component of monetary policy. The evidence of asymmetry could simply reflect the failure to control for these omitted factors. In this paper, we reconsider the asymmetric effects of monetary shocks in the context of a small open economy using information from the yield curve to measure the stance of domestic monetary policy, while allowing both real and monetary foreign shocks to have asymmetric effects on output. Our principal finding is that while controlling for foreign factors dampens the asymmetry in the effects of exogenous domestic monetary shocks, there is nonetheless strong evidence of asymmetry when the effects of the exogenous and systematic components of the yield spread are considered jointly. We find no evidence of asymmetry in the effects of real factors.
Download or read book Asymmetric Effects of Monetary Policy in the U S and Brazil written by Ioannis Pragidis and published by . This book was released on 2013 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: We empirically test the effects of anticipated and unanticipated monetary policy shocks on the growth rate of real industrial production and explicitly test for different types of asymmetries in monetary policy implementation for two major international economies, the U.S. and Brazil. We depart from the conventional method of VAR analysis to estimate unanticipated monetary shocks and instead we use a combination of other methods. We first identify the Taylor rule that best describes the reaction of both central banks and then we test both forward looking linear and nonlinear models concluding that a Logistic Smooth Transition Autoregressive (LSTAR) forward looking model of the Taylor rule best describes the US FED Funds rate while a linear Taylor rule with the inclusion of a dummy variable best describes the reaction of the Central Bank of Brazil (BCB). We then use in-sample forecast errors in order to derive or identify the unexpected monetary shocks for both countries. In line with Cover (1992), we use these shocks to explore any asymmetries in the conduct of monetary policy on the growth rate of real industrial production. We also find asymmetries between anticipated and unanticipated monetary shocks as well as between effects of positive and negative shocks.
Download or read book Asymmetric Effects of Economic Activityon Inflation written by Mr.Douglas Laxton and published by International Monetary Fund. This book was released on 1994-11-01 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the evidence on asymmetries in the effects of activity on inflation. Data for the G-7 countries are found to strongly support the view that the inflation-activity relationship is nonlinear, with high levels of activity raising inflation by more than low levels decrease it. In the face of such asymmetries, the average level of output in an economy subject to demand shocks will be below the level of output at which there is no tendency for inflation to rise or fall, contrary to the implications of linear models. One implication of these results is that policymakers can raise the average level of output over time by responding promptly to demand shocks, thus reducing the variance of output around trend.
Download or read book The Asymmetric Effects of Monetary Policy written by Richard Arden and published by . This book was released on 2001 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper offers evidence of the asymmetric effect of monetary policy on economic activity. First, asymmetric adjustment is captured in three macroeconomic relationships for investment, the consumer price deflator, inventories and house prices. These relationships are then embedded in a small macroeconometric model of the UK economy. Simulations on this model allow us to trace through the interactions of these asymmetries so that a monetary shock, measured by a change in interest rates, affects output and inflation in the short run in ways dependent both upon the sign of the shock and the initial state of the economy. A monetary easing has significantly larger effects on inflation when the economy is close to capacity compared with when it is in recession. These effects are captured by intrinsic asymmetries in the model, due to the use of the logarithm of interest rates and the logarithm of unemployment in the wage equation, as well as the asymmetries coming from the non-linearities which we have introduced explicitly.
Download or read book The Asymmetric Effects of Monetary Policy written by Anna Florio and published by . This book was released on 2004 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper deals with the asymmetric effects on output of tight and easy monetary policy: the output reduction following a negative monetary policy shock appears bigger than the expansion induced by similar sized positive shock. The paper first reviews historical evidence of asymmetry, focusing on the United States, Japan and Italy. This is followed by a review of the econometric literature on monetary policy asymmetry and consideration of the theoretical reasons that can explain this asymmetry.
Download or read book The Asymmetric Effects of Monetary Policy written by Charles L. Weise and published by . This book was released on 1998 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper tests for nonlinearity in a standard vector autoregression including output, prices, and money supply, using an estimation strategy that is consistent with a wide range of structural macroeconomic models. Shocks to the money supply are found to have stronger output effects and weaker price effects when output growth is initially low. Positive and negative monetary shocks are found to have nearly symmetric effects. In addition, there is some evidence that shocks of different magnitudes have asymmetric effects. These results are consistent with the view that the aggregate supply curve is convex.
Download or read book Advances in Markov Switching Models written by James D. Hamilton and published by Springer Science & Business Media. This book was released on 2013-06-29 with total page 267 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book is a collection of state-of-the-art papers on the properties of business cycles and financial analysis. The individual contributions cover new advances in Markov-switching models with applications to business cycle research and finance. The introduction surveys the existing methods and new results of the last decade. Individual chapters study features of the U. S. and European business cycles with particular focus on the role of monetary policy, oil shocks and co movements among key variables. The short-run versus long-run consequences of an economic recession are also discussed. Another area that is featured is an extensive analysis of currency crises and the possibility of bubbles or fads in stock prices. A concluding chapter offers useful new results on testing for this kind of regime-switching behaviour. Overall, the book provides a state-of-the-art over view of new directions in methods and results for estimation and inference based on the use of Markov-switching time-series analysis. A special feature of the book is that it includes an illustration of a wide range of applications based on a common methodology. It is expected that the theme of the book will be of particular interest to the macroeconomics readers as well as econometrics professionals, scholars and graduate students. We wish to express our gratitude to the authors for their strong contributions and the reviewers for their assistance and careful attention to detail in their reports.
Download or read book The Asymmetric Effects of Deflationary Monetary Shocks written by Arthur Ernest Gandolfi and published by . This book was released on 1993 with total page 122 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Changing Effects of Monetary Policy in the U S Evidence from a Time Varying Coefficient VAR written by Christian Melzer and published by . This book was released on 2008 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: We estimate a time-varying coefficient VAR model for the U.S. economy to analyse (i) if the effect of monetary policy on output has been changing systematically over time, and (ii) if monetary policy has asymmetric effects over the business cycle. We find that the impact of monetary policy shocks has been gradually declining over the sample period (1962-2002), as some theories of the monetary transmission mechanism imply. In addition, our results indicate that the effects of monetary policy are greater in a recession than in a boom
Download or read book Asymmetric Effects of Economic Activity on Inflation written by Douglas Laxton and published by . This book was released on 2006 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the evidence on asymmetries in the effects of activity on inflation. Data for the G-7 countries are found to strongly support the view that the inflation-activity relationship is nonlinear, with high levels of activity raising inflation by more than low levels decrease it. In the face of such asymmetries, the average level of output in an economy subject to demand shocks will be below the level of output at which there is no tendency for inflation to rise or fall, contrary to the implications of linear models. One implication of these results is that policymakers can raise the average level of output over time by responding promptly to demand shocks, thus reducing the variance of output around trend.
Download or read book Regional Aspects of Monetary Policy in Europe written by Jürgen von Hagen and published by Springer Science & Business Media. This book was released on 2013-04-17 with total page 331 pages. Available in PDF, EPUB and Kindle. Book excerpt: Monetary union has dawned in Europe. Now that the common currency is a reality, questions concerning the practical conduct of monetary policy in the European Monetary Union (EMU) are moving to the forefront of the policy debate. Among these, one of the most critical is how the new monetary union will cope with the large heterogeneity of its member economies. Given the large differences in economic and financial structures among the EMU member states, monetary policy is likely to affect different member economies in different ways. Regional Aspects of Monetary Policy in Europe collects the proceedings of an international conference held at the Center for European Integration Studies of the University of Bonn, dedicated to this issue. The contributions to this conference fall into two parts. The first part consists of empirical and theoretical studies of the regional effects of monetary policy in heterogeneous monetary unions. The second part consists of papers analyzing the political economy of monetary policy in a monetary union of heterogeneous regions or member states. The papers all support the conclusion that regional differences in the responses to a common monetary policy will make European monetary policy especially difficult in the years to come. Such differences arise from a variety of sources, and they cannot be expected to be mere teething troubles that will disappear after a while. Even if they were ignored in the run-up to the EMU, Europe's central bankers and economic policy makers will have to learn how to cope with such differences in the future.
Download or read book A Measurement of the Asymmetric Effects of Monetary Policy in Costa Rica written by Mauricio Mayorga-Martinez and published by . This book was released on 1998 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The main objective of this research is to collect some empirical evidence on the relationship between monetary and real phenomena in the short and long run as well as the possible asymmetric effects of monetary policy. Among the factors that contribute to the asymmetry are changes in expectations, credit restrictions, and price stickiness. For Costa Rica, monetary asymmetry was intended to be captured through the use of vector autoregressions (VARs) applied to the aggregate M1 and two-stage least squares applied to the interest rates. For the former case, there is no significant evidence of a relationship of short-run movements of M1 on real growth and employment. There exists, however, some indication of an impact of changes in M1 upon the interest rates. Regarding the effect of changes, there is an asymmetric impact upon real activity when a two-period lag is used. Regarding monetary policy, these results imply the following: Monetary shocks are an important source of pressure on the aggregate demand; monetary policy may contribute to economic growth through smoothing the impact of monetary shocks; interest rates may become leading indicators of price variations; and finally, pressure groups may be interested in looking for reductions of interest rates. As a conclusion, the research points out the absences of the non-neutrality hypothesis. Variations of M1 exert pressures on real activity through time.
Download or read book International Dimensions of Monetary Policy written by Jordi Galí and published by University of Chicago Press. This book was released on 2010-03-15 with total page 663 pages. Available in PDF, EPUB and Kindle. Book excerpt: United States monetary policy has traditionally been modeled under the assumption that the domestic economy is immune to international factors and exogenous shocks. Such an assumption is increasingly unrealistic in the age of integrated capital markets, tightened links between national economies, and reduced trading costs. International Dimensions of Monetary Policy brings together fresh research to address the repercussions of the continuing evolution toward globalization for the conduct of monetary policy. In this comprehensive book, the authors examine the real and potential effects of increased openness and exposure to international economic dynamics from a variety of perspectives. Their findings reveal that central banks continue to influence decisively domestic economic outcomes—even inflation—suggesting that international factors may have a limited role in national performance. International Dimensions of Monetary Policy will lead the way in analyzing monetary policy measures in complex economies.
Download or read book Pricing Policies and Inflation Inertia written by Mr.Michael Kumhof and published by International Monetary Fund. This book was released on 2003-04-01 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper provides a monetary model with nominal rigidities that differs from the conventional New Keynesian model with firms setting pricing policies instead of price levels. In response to permanent or highly persistent monetary policy shocks this model generates the empirically observed slow (inertial) and prolonged (persistent) reaction of the inflation rate, and also the recession that typically accompanies moderate disinflations. The reason is that firms respond to such shocks mostly through a change in the long-run or inflation updating component of their pricing policies. With staggered pricing policies there is a time lag before this is reflected in aggregate inflation.
