Download or read book Can Rational Expectations Stick price Models Expalin Inflation Dynamics written by Jeremy Rudd and published by . This book was released on 2003 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Can Rational Expectations Sticky price Models Explain Inflation Dynamics written by Jeremy Bay Rudd and published by . This book was released on 2003 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book How Costly Will Reining in Inflation Be It Depends on How Rational We Are written by Mr. Jorge A Alvarez and published by International Monetary Fund. This book was released on 2023-02-03 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: We document that past highly inflationary episodes are often characterized by a steeper inflationslack relationship. We show that model-generated data from a standard small Dynamic Stochastic General Equilibrium (DSGE) model can replicate this empirical finding when estimated with different expectation formation processes. When inflation becomes de-anchored and expectations drift, we can observe high inflation even with a mildly positive output gap in response to cost-push shocks. The results imply that we should not use an unconditioned (not controlling for expectations change) Phillips curve estimated in normal times to predict the cost of reining in inflation. Our optimal policy exercises prescribe early monetary policy tightening and then easing in the context of positive output gaps and inflation far above the central bank target.

Download or read book Rational Expectations written by Steven M. Sheffrin and published by Cambridge University Press. This book was released on 1996-06-13 with total page 204 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book develops the idea of rational expectations and surveys its use in economics today.

Download or read book Rational Expectations written by Graham Keith Shaw and published by . This book was released on 1984 with total page 150 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Modelling Inflation Dynamics written by Jeremy Bay Rudd and published by . This book was released on 2005 with total page 78 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Rational Expectations written by Fouad Sabry and published by One Billion Knowledgeable. This book was released on 2024-03-29 with total page 272 pages. Available in PDF, EPUB and Kindle. Book excerpt: What is Rational Expectations Rational expectations is an economic theory that seeks to infer the macroeconomic consequences of individuals' decisions based on all available knowledge. It assumes that individuals actions are based on the best available economic theory and information, and concludes that government policies cannot succeed by assuming widespread systematic error by individuals. How you will benefit (I) Insights, and validations about the following topics: Chapter 1: Rational expectations Chapter 2: Adaptive expectations Chapter 3: Macroeconomics Chapter 4: Inflation Chapter 5: New Keynesian economics Chapter 6: Phillips curve Chapter 7: Lucas critique Chapter 8: Macroeconomic model Chapter 9: Neutrality of money Chapter 10: John B. Taylor Chapter 11: Thomas J. Sargent Chapter 12: Edmund Phelps Chapter 13: Policy-ineffectiveness proposition Chapter 14: Lucas islands model Chapter 15: Neoclassical synthesis Chapter 16: New classical macroeconomics Chapter 17: NAIRU Chapter 18: History of macroeconomic thought Chapter 19: McCallum rule Chapter 20: Lucas aggregate supply function Chapter 21: Taylor contract (economics) (II) Answering the public top questions about rational expectations. (III) Real world examples for the usage of rational expectations in many fields. Who this book is for Professionals, undergraduate and graduate students, enthusiasts, hobbyists, and those who want to go beyond basic knowledge or information for any kind of Rational Expectations.

Download or read book Rational Expectations and Inflation written by Thomas J. Sargent and published by New York : Harper & Row. This book was released on 1986 with total page 234 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book What Determines Inflation Dynamics written by Inseok Shin and published by . This book was released on 1997 with total page 226 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Expectations and the Rate of Inflation written by Iván Werning and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: What is the effect of higher expectations of future inflation on current inflation? I compute this passthrough for a series of canonical firm-pricing models, but allowing for arbitrary (non-rational) expectations. In the Calvo model, the expectational-passthrough can be made arbitrarily close to zero for sufficiently high stickiness, but in practice, for reasonable parameters, passthrough is close to its upper bound of 1. In the Taylor model, in contrast, the upper bound for passthrough is 1⁄2 instead of 1. For a general time-dependent model I show that: (i) passthrough is given by a measurable sufficient statistic: the ratio of the average duration of ongoing price spells to that of completed price spells; (ii) the lowest theoretically possible passthrough equals 1⁄2 by Taylor pricing; and (iii) passthrough can be theoretically greater than 1 with hazards that decrease over time; (iv) breaking down the passthrough across horizons, it is expectations in the near future that matters the most, expectations of long-run inflation are completely irrelevant; (v) I provide a generalized Phillips curve for current inflation as a linear function of expectations of future inflation and realized past inflations; (vi) I show that the sum of all coefficients, both past and future, sums to one, so that the long-run Phillips curve is vertical. Finally, I study state-dependent "menu cost" models and show that passthrough in these models can be extremely low or extremely high, depending on the exact specification and inflation rate. I suggest a model where firms must pay a fixed cost for changing their sS pricing policy bands. This extension gives a passthrough of 0 for small enough changes in expectations.

Download or read book A Monetarist Model of Inflationary Expectations written by John Rutledge and published by . This book was released on 1974 with total page 152 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Asset Prices and Monetary Policy written by John Y. Campbell and published by University of Chicago Press. This book was released on 2008-11-15 with total page 444 pages. Available in PDF, EPUB and Kindle. Book excerpt: Economic growth, low inflation, and financial stability are among the most important goals of policy makers, and central banks such as the Federal Reserve are key institutions for achieving these goals. In Asset Prices and Monetary Policy, leading scholars and practitioners probe the interaction of central banks, asset markets, and the general economy to forge a new understanding of the challenges facing policy makers as they manage an increasingly complex economic system. The contributors examine how central bankers determine their policy prescriptions with reference to the fluctuating housing market, the balance of debt and credit, changing beliefs of investors, the level of commodity prices, and other factors. At a time when the public has never been more involved in stocks, retirement funds, and real estate investment, this insightful book will be useful to all those concerned with the current state of the economy.

Download or read book Money and Prices in Models of Bounded Rationality in High Inflation Economies written by Albert Marcet and published by . This book was released on 2007 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies the short run correlation of inflation and money growth. We study whether a model of learning can do better than a model of rational expectations, we focus our study on countries of high inflation. We take the money process as an exogenous variable, estimated from the data through a switching regime process. We find that the rational expectations model and the model of learning both offer very good explanations for the joint behavior of money and prices.

Download or read book A Reader s Guide to Rational Expectations written by Deborah A. Redman and published by Edward Elgar Publishing. This book was released on 1992 with total page 216 pages. Available in PDF, EPUB and Kindle. Book excerpt: The major purpose of this work is to make staying up to date with rational expectations (RE) easier for economists in government, academia and industry, as well as for students.

Download or read book The Formation of Expectations Inflation and the Phillips Curve written by Olivier Coibion and published by . This book was released on 2017 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper argues for a careful (re)consideration of the expectations formation process and a more systematic inclusion of real-time expectations through survey data in macroeconomic analyses. While the rational expectations revolution has allowed for great leaps in macroeconomic modeling, the surveyed empirical micro-evidence appears increasingly at odds with the full-information rational expectation assumption. We explore models of expectation formation that can potentially explain why and how survey data deviate from full-information rational expectations. Using the New Keynesian Phillips curve as an extensive case study, we demonstrate how incorporating survey data on inflation expectations can address a number of otherwise puzzling shortcomings that arise under the assumption of full-information rational expectations.

Download or read book The Tradeoff Between Inflation and the Real Economy written by Erika Gulyas and published by . This book was released on 2005 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We use the inflation premium - the difference between nominal and real interest rates - as a proxy for expected inflation in the context of the New Keynesian Phillips Curve. Using data from inflation-indexed and nominal bonds we estimate a forward-looking Phillips curve for the United Kingdom over the period 1985-2004. The proposed model describes UK inflation dynamics considerably better than does the standard hybrid New Keynesian Phillips Curve under the assumption of rational expectations. In contrast with the findings in the rest of the literature we find that there still exists a tradeoff between inflation and the stance of the real economy, regardless of the empirical measure used. This relationship also persists in the period since the UK adopted inflation targeting as a framework for monetary policy.

Download or read book Near rationality and Inflation in Two Monetary Regimes written by Laurence M. Ball and published by . This book was released on 2000 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: Sticky-price models with rational expectations fail to capture the inertia in U.S. inflation. Models with backward-looking expectations capture current inflation behavior, but are unlikely to fit other monetary regimes. This paper seeks to overcome these problems with a near-rational model of expectations. In the model, agents make univariate forecasts of inflation: they use information on past inflation optimally, but they ignore other variables. The paper tests sticky-price models with near-rational expectations for two periods in U.S. history, the post-1960 period of persistent inflation and the period from 1879 to 1914, when inflation was not persistent. The models fit the data for both periods; in contrast, both rational-expectations and backward-looking models fail for at least one period