Download or read book Optimal monetary policy in a model of the credit channel written by Fiorella De Fiore and published by . This book was released on 2009 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Optimal Monetary Policy in a Model of Money and Credit written by and published by . This book was released on 2011 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Optimal Monetary Policy under Uncertainty Second Edition written by Richard T. Froyen and published by Edward Elgar Publishing. This book was released on 2019 with total page 466 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book provides a thorough survey of the model-based literature on optimal monetary in a stochastic setting. The survey begins with the literature of the 1970s which focused on the information problem in policy design and extends to the New Keynesian approach of the 1990s which centered on evaluating alternative targeting strategies. New to the second edition is consideration of research since the world financial crisis on the role of financial markets and institutions in the conduct of monetary policy.
Download or read book Heterogeneous credit Channels and Optimal Monetary Policy in a Monetary Union written by Leonardo Gambacorta and published by . This book was released on 1998 with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Stock Market Channel of Monetary Policy written by Mr.Ralph Chami and published by International Monetary Fund. This book was released on 1999-02-01 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper argues that the stock market is an important channel of monetary policy. Monetary policy affects real economic activity because inflation levies a property tax on stocks in addition to an income tax on dividend payments. Inflation thus taxes stocks more heavily than it does bonds. Households alter their required rate of return as inflation changes, and firms adjust production in order to satisfy their shareholders’ demands. As the stock market channel grows in importance, the appropriate intermediate target for the central bank is the price level, with price stability being the ultimate goal.
Download or read book Bank Leverage and Monetary Policy s Risk Taking Channel written by Mr.Giovanni Dell'Ariccia and published by International Monetary Fund. This book was released on 2013-06-06 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: We present evidence of a risk-taking channel of monetary policy for the U.S. banking system. We use confidential data on the internal ratings of U.S. banks on loans to businesses over the period 1997 to 2011 from the Federal Reserve’s survey of terms of business lending. We find that ex-ante risk taking by banks (as measured by the risk rating of the bank’s loan portfolio) is negatively associated with increases in short-term policy interest rates. This relationship is less pronounced for banks with relatively low capital or during periods when banks’ capital erodes, such as episodes of financial and economic distress. These results contribute to the ongoing debate on the role of monetary policy in financial stability and suggest that monetary policy has a bearing on the riskiness of banks and financial stability more generally.
Download or read book Optimal Monetary Policy with the Risk taking Channel written by Angela Abbate and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Empirical research suggests that lower interest rates induce banks to take higher risks. We assess analytically what this risk-taking channel implies for optimal monetary policy in a tractable New Keynesian model. We show that this channel creates a motive for the planner to stabilize the real rate. This objective conflicts with the standard inflation stabilization objective. Optimal policy thus tolerates more inflation volatility. An inertial Taylor-type reaction function becomes optimal. We then quantify the significance of the risk-taking channel for monetary policy in an estimated medium-scale extension of the model. Ignoring the channel when designing policy entails non-negligible welfare costs (0.7% lifetime consumption equivalent).
Download or read book The Global Dimension of Inflation Evidence from Factor Augmented Phillips Curves written by Sandra Eickmeier and published by . This book was released on 2012 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the global dimension of inflation in 24 OECD countries between 1980 and 2007 in a Phillips curve framework. We decompose output gaps and changes in unit labour costs into common (or global) and idiosyncratic components using a factor analysis and introduce these components separately in the regression. We find that the common component of changes in unit labour costs has a notable impact on inflation. Movements in import price inflation (not driven by oil supply) and foreign competition and global interest rate developments also affect inflation. Policy makers need to carefully observe those variables when assessing inflation developments.
Download or read book Credit Frictions and Optimal Monetary Policy written by Vasco Cúrdia and published by . This book was released on 2009 with total page 82 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Is There a credit Channel for Monetary Policy written by R. Glenn Hubbard and published by . This book was released on 1994 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper argues that the terms `money view' and `credit view' are not always well defined in theoretical and empirical debates over the transmission mechanism of monetary policy. Recent models of information and incentive problems in financial markets suggest the usefulness of decomposing the transmission mechanism into two parts: one related to effects of policy-induced changes on the overall level of real costs of funds, and one related to `financial accelerator' effects stemming from impacts of policy actions on the financial positions of borrowers or intermediaries. The results presented here support the idea that the spending decisions of a significant group of borrowers are influenced by their balance sheet condition. Whether a bank-lending channel is operative is less clear, however. More micro evidence at the level of individual borrower-lender transactions is needed to resolve this question.
Download or read book Monetary Policy Strategy written by Frederic S. Mishkin and published by MIT Press. This book was released on 2009-08-21 with total page 561 pages. Available in PDF, EPUB and Kindle. Book excerpt: A leading academic authority and policymaker discusses monetary policy strategy from the perspectives of both scholar and practitioner, offering theory, econometric evidence, and extensive case studies. This book by a leading authority on monetary policy offers a unique view of the subject from the perspectives of both scholar and practitioner. Frederic Mishkin is not only an academic expert in the field but also a high-level policymaker. He is especially well positioned to discuss the changes in the conduct of monetary policy in recent years, in particular the turn to inflation targeting. Monetary Policy Strategy describes his work over the last ten years, offering published papers, new introductory material, and a summing up, “Everything You Wanted to Know about Monetary Policy Strategy, But Were Afraid to Ask,” which reflects on what we have learned about monetary policy over the last thirty years. Mishkin blends theory, econometric evidence, and extensive case studies of monetary policy in advanced and emerging market and transition economies. Throughout, his focus is on these key areas: the importance of price stability and a nominal anchor; fiscal and financial preconditions for achieving price stability; central bank independence as an additional precondition; central bank accountability; the rationale for inflation targeting; the optimal inflation target; central bank transparency and communication; and the role of asset prices in monetary policy.
Download or read book A Macro Model of the Credit Channel in a Currency Union Member written by Issouf Samaké and published by International Monetary Fund. This book was released on 2010-08-01 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper applies and extends a theoretical model built by Agénor and Montiel (2007) by exploring the effectiveness of government bonds and monetary policy in a small, open, credit-based economy with a fixed exchange rate. The model is applied to Benin, a member of a currency union, using a general equilibrium model with stochastic simulation. Model calibration replicates the historical pattern for 1996–2009. Policy experiments simulated an increase in government securities in Benin’s regional market and a cut in the reserve requirement. Simulations produced mixed results. It appears that, among other factors, excess bank liquidity lowers the effectiveness of monetary policy instruments through the credit channel and that government bonds can help mop up excess bank liquidity.
Download or read book Financial Frictions and Monetary Policy Conduct written by Matthieu Darracq Paries and published by . This book was released on 2018 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Thesis aims at evaluating monetary policy in presence of financial frictions both from an empirical and structural perspective. Along those lines, multi-variate time-series framework as well as model with more explicit theoretical foundations will be deployed. The Thesis presents original contributions in various fields of monetary and financial macroeconomics.The main motivation for the applied research presented in this Thesis are twofold. It responded both to the need for deeper research on macro-financial linkages and to the growing interest of policy institutions for the model-based policy advise. First, the Great recession and in particular, the typology of crisis episodes in Europe over the last decade, unveiled new challenges for monetary policy conduct, notably related to the prevalence of financial factors in cyclical fluctuations, the design of non-standard measures and the interactions with financial service policies. The second motivation has to do with the growing role for structural models in the preparation of monetary policy within central banks. Over the last decades, academic research and central bank practices have mutually benefited from strong synergies, whereby quantitative methods and theoretical advances have had a lasting influence on main preparation avenues for monetary policy making.In Chapter 1, a set of empirical studies intend to demonstrate the prevalence of financial shocks underlying the euro area macroeconomic performance during the Great recession. In particular, BVAR models can identify credit supply shocks and quantify their contribution to the various recessionary episodes over the last decade.Thereafter, Chapter 2 explores more structurally the transmission mechanism of financial shocks together with their heterogeneity across the euro area through the lens of DSGE models featuring a relevant set of demand-side as well as supply-side credit frictions.Against this background, the Thesis examine more normative aspects of monetary policy conduct starting with derivation of optimal monetary policy in selected DSGE models, which is the focus of Chapter 3. The Ramsey approach to optimal monetary provides a clear benchmark for formulating normative prescriptions. We analyse the main properties of the Ramsey allocation within a set of quantitative DSGE models, thereby bring new insight on various closed economy and open economy policy challenges.At times of crisis, as financial-driven recessions bring the monetary policy interest rates to their effective lower bound, central bank deployed a set of non-standard measures in order to engineer the intended policy accommodation. Chapter 4 presents several studies which extend DSGE models to analyse the role of non-standard monetary policy measures like asset purchase programmes or long-term liquidity operations. The credit channel of those measures will be the focus of the analysis. From a more normative standpoint, the optimal central bank asset purchase strategy will be derived.Finally, in Chapter 5, the normative assessment of monetary policy conduct in presence of financial frictions calls for considering strategic interactions with other policies, and notably macroprudential policy. Such interactions are all the more relevant when analysed in a monetary union context through multi-country DSGE models.
Download or read book Fiscal Sustainability and Policy Implications for the Euro Area written by Fabrizio Balassone and published by . This book was released on 2009 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Optimal Monetary Policy with the Cost Channel and Monopolistically Competitive Bank written by Salem M. Abo-Zaid and published by . This book was released on 2015 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies the optimal nominal policy interest rate in a model with the cost channel and imperfect competition in the banking sector. Due to this market power, the interest rate on deposits is relatively low; in particular it is lower than the policy interest rate. This, in turn, leads to a suboptimal level of deposits and, as a result, to a low level of intermediation. Deviations from the Friedman Rule are optimal in this setup regardless of the assumption about price rigidity; since households can hold their assets in the form of cash or deposits, taxing money, which is an imperfect substitute for deposits, is optimal in order to increase the level of deposits and encourage intermediation. They main results of the paper are robust to the introduction of market power in the loan market as well as stickiness in both the deposit and the loan markets.
Download or read book Monetary Policy Transmission in Emerging Markets and Developing Economies written by Mr.Luis Brandao-Marques and published by International Monetary Fund. This book was released on 2020-02-21 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: Central banks in emerging and developing economies (EMDEs) have been modernizing their monetary policy frameworks, often moving toward inflation targeting (IT). However, questions regarding the strength of monetary policy transmission from interest rates to inflation and output have often stalled progress. We conduct a novel empirical analysis using Jordà’s (2005) approach for 40 EMDEs to shed a light on monetary transmission in these countries. We find that interest rate hikes reduce output growth and inflation, once we explicitly account for the behavior of the exchange rate. Having a modern monetary policy framework—adopting IT and independent and transparent central banks—matters more for monetary transmission than financial development.
Download or read book Credit Friction and Optimal Monetary Policy written by and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
