Download or read book Unconventional Monetary Policy and the Anchoring of Inflation Expectations written by Matteo Ciccarelli and published by . This book was released on 2017 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Unconventional Monetary Policy and the Anchoring of Inflation Expectations written by Matteo Ciccarelli and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Inflation Expectations written by Peter J. N. Sinclair and published by Routledge. This book was released on 2009-12-16 with total page 402 pages. Available in PDF, EPUB and Kindle. Book excerpt: Inflation is regarded by the many as a menace that damages business and can only make life worse for households. Keeping it low depends critically on ensuring that firms and workers expect it to be low. So expectations of inflation are a key influence on national economic welfare. This collection pulls together a galaxy of world experts (including Roy Batchelor, Richard Curtin and Staffan Linden) on inflation expectations to debate different aspects of the issues involved. The main focus of the volume is on likely inflation developments. A number of factors have led practitioners and academic observers of monetary policy to place increasing emphasis recently on inflation expectations. One is the spread of inflation targeting, invented in New Zealand over 15 years ago, but now encompassing many important economies including Brazil, Canada, Israel and Great Britain. Even more significantly, the European Central Bank, the Bank of Japan and the United States Federal Bank are the leading members of another group of monetary institutions all considering or implementing moves in the same direction. A second is the large reduction in actual inflation that has been observed in most countries over the past decade or so. These considerations underscore the critical – and largely underrecognized - importance of inflation expectations. They emphasize the importance of the issues, and the great need for a volume that offers a clear, systematic treatment of them. This book, under the steely editorship of Peter Sinclair, should prove very important for policy makers and monetary economists alike.
Download or read book Monetary Policy Mistakes and the Evolution of Inflation Expectations written by Athanasios Orphanides and published by DIANE Publishing. This book was released on 2010 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: What monetary policy framework, if adopted by the Federal Reserve, would have avoided the Great Inflation of the 1960s and 1970s? The authors use counterfactual simulations of an estimated model of the U.S. economy to evaluate alternative monetary policy strategies. The authors document that policymakers at the time both had an overly optimistic view of the natural rate of unemployment and put a high priority on achieving full employment. They show that in the presence of realistic informational imperfections and with an emphasis on stabilizing economic activity, an optimal control approach would have failed to keep inflation expectations well anchored, resulting in highly volatile inflation during the 1970s. Charts and tables.
Download or read book Unconventional Monetary Policy and Inflation Expectations in the Euro Area written by Sina Aßhoff and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Effect of Conventional and Unconventional Monetary Policy Rules on Inflation Expectations written by Roger E. A. Farmer and published by . This book was released on 2012 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper has three parts. Part 1 constructs a classical economic model of inflation, augmented by a complete set of financial markets; I call this the core monetary model. Part 2 develops a series of calibrated examples to illustrate how the core monetary model explains the history of inflation after WWII and Part 3 provides evidence to show that the unconventional monetary policy, followed in the wake of the 2008 financial crisis, was effective in stabilizing inflation expectations. The core monetary model provides a unified framework to explain how an interest rule can be used to control inflation in normal times, and to explain the purpose of unconventional monetary policy when policy attains the zero lower bound. I argue that management of the variation in the composition of the Fed's balance sheet, is an important tool in a central bank's arsenal that can be used to help prevent deflation in the wake of a financial crisis.
Download or read book Monetary Policy Surprises and Inflation Expectation Dispersion written by Bertrand Gruss and published by INTERNATIONAL MONETARY FUND. This book was released on 2020-11-13 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: Anchoring of inflation expectations is of paramount importance for central banks’ ability to deliver stable inflation and minimize price dispersion. Relying on daily interest rates and inflation forecasts from major financial institutions in the United States, we calculate monetary policy surprises of individual analysts as the unexpected changes in the federal funds rate before the meetings of the Federal Reserve Board. We then assess the effect of monetary policy surprises on the dispersion of inflation expectations, a proxy for the extent of anchoring, which is based on the same analysts’ inflation projections submit-ted after the Fed meetings. With an identification strategy that hinges on a tight window around the Fed meetings, we find that monetary policy surprises lead to an increase in the dispersion of inflation expectations up to nine months after the policy meeting. We rationalize these results with a partial equilibrium model that features rational expectations and sticky information. When we allow the degree of information rigidity to depend on the realization of firm-specific shocks, the theoretical results are qualitatively consistent and quantitatively close to the empirical evidence.
Download or read book Essays on Unconventional Monetary Policy Inflation Expectations and Commodity Prices written by Michael Hachula and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Per Jacobsson Lecture written by International Monetary Fund and published by International Monetary Fund. This book was released on 2014-04-08 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: Since the grave disruption of the subprime market at the start of the global financial crisis triggered major turbulences in the functioning of money markets in all large advanced economies, central bankers have experienced extraordinarily demanding and difficult times, characterized by a succession of shocks unseen, in the advanced economies, since World War II. Given the structurally very different economies that central banks were dealing with, one could have expected that the shock of the crisis would have accentuated their differences and given rise to an even more diverse setof central bank policies, conceptual references, and measures in a selfish, inward-looking mode. Instead, however, a phenomenon of “practical and conceptual rapprochement” took place between central banks, amidst the economic and financial turmoil, with the closest central bank cooperation ever, as symbolically illustrated by the coordinated decrease of interest rates in October 2008. The crisis also started or accelerated a multidimensional process of convergence of key elements of monetary policy thinking and policymaking—“conceptual convergence”—that is far from being achieved, but calls for great attention from both academia and policymakers. This Per Jacobsson Lecture concentrates on this convergence process, reflecting as well on some theoretical and practical issues that are associated with unconventional monetary policy liquidity and quantitative measures and the forward guidance generalization, themselves part of the conceptual convergence phenomenon.
Download or read book Inflation News and Euro Area Inflation Expectations written by Juan Angel Garcia and published by International Monetary Fund. This book was released on 2018-07-19 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: Do euro area inflation expectations remain well-anchored? This paper finds that the protracted period of low (and below-target) inflation in the euro area since 2013 has weakened their anchoring. Testing their sensitivity to inflation and macroeconomic news, this paper expands existing results in two key dimensions. First, by analyzing all available (advanced) inflation releases. Second, the reactions of expectations are investigated at daily, time-varying and intraday frequency regressions to add robustness to our conclusions. Results point to a significant impact of inflation news over recent years that had not been observed before in the euro area.
Download or read book Monetary Policy Responses to the Crisis and Exit Strategies written by Makoto Minegishi and published by . This book was released on 2010 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Monetary Policy Strategies written by International Monetary Fund and published by International Monetary Fund. This book was released on 1988-10-04 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper considers the merits of rules and discretion for monetary policy when the structure of the macroeconomic model and the probability distributions of disturbances are not well defined. It is argued that when it is costly to delay policy reactions to seldom-experienced shocks until formal algorithmic learning has been accomplished, and when time consistency problems are significant, a mixed strategy that combines a simple verifiable rule with discretion is attractive. The paper also discusses mechanisms for mitigating credibility problems and emphasizes that arguments against various types of simple rules lose their force under a mixed strategy.
Download or read book Credibility of Policies Versus Credibility of Policymakers written by Mr.Paul R. Masson and published by International Monetary Fund. This book was released on 1994-05-01 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: Standard models of policy credibility, defined as the expectation that an announced policy will be carried out, emphasize the preferences of the policymaker, and the role of tough policies in signalling toughness and raising credibility. Whether a policy is carried out, however, will also reflect the state of the economy. We present a model in which a policymaker maintains a fixed parity in good times, but devalues if the unemployment rate gets too high. Our main conclusion is that if there is persistence in unemployment, observing a tough policy in a given period may lower rather than raise the credibility of a no-devaluation pledge in subsequent periods. We test this implication on data for the interest rate differential between France and Germany and find support for our hypothesis.
Download or read book Imperfect Knowledge Inflation Expectations and Monetary Policy written by Athanasios Orphanides and published by . This book was released on 2002 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the role that imperfect knowledge about the structure of the economy plays in the formation of expectations, macroeconomic dynamics, and the efficient formulation of monetary policy. Economic agents rely on an adaptive learning technology to form expectations and to update continuously their beliefs regarding the dynamic structure of the economy based on incoming data. The process of perpetual learning introduces an additional layer of dynamic interaction between monetary policy and economic outcomes. We find that policies that would be efficient under rational expectations can perform poorly when knowledge is imperfect. In particular, policies that fail to maintain tight control over inflation are prone to episodes in which the public's expectations of inflation become uncoupled from the policy objective and stagflation results, in a pattern similar to that experienced in the United States during the 1970s. Our results highlight the value of effective communication of a central bank's inflation objective and of continued vigilance against inflation in anchoring inflation expectations and fostering macroeconomic stability.
Download or read book Advancing the Frontiers of Monetary Policy written by Tobias Adrian and published by International Monetary Fund. This book was released on 2018-04-13 with total page 297 pages. Available in PDF, EPUB and Kindle. Book excerpt: Contributors working at the International Monetary Fund present 14 chapters on the development of monetary policy over the past quarter century through the lens of the evolution of inflation-forecast targeting. They describe the principles and practices of inflation-forecast targeting, including managing expectations, the implementation of a forecasting and policy analysis system, monetary operations, monetary policy and financial stability, financial conditions, and transparency and communications; aspects of inflation-forecast targeting in Canada, the Czech Republic, India, and the US; and monetary policy challenges faced by low-income countries and how inflation-forecast targeting can provide an anchor in countries with different economic structures and circumstances.
Download or read book Evolving Monetary Policy Frameworks in Low Income and Other Developing Countries written by International Monetary Fund and published by International Monetary Fund. This book was released on 2015-10-23 with total page 74 pages. Available in PDF, EPUB and Kindle. Book excerpt: Over the past two decades, many low- and lower-middle income countries (LLMICs) have improved control over fiscal policy, liberalized and deepened financial markets, and stabilized inflation at moderate levels. Monetary policy frameworks that have helped achieve these ends are being challenged by continued financial development and increased exposure to global capital markets. Many policymakers aspire to move beyond the basics of stability to implement monetary policy frameworks that better anchor inflation and promote macroeconomic stability and growth. Many of these LLMICs are thus considering and implementing improvements to their monetary policy frameworks. The recent successes of some LLMICs and the experiences of emerging and advanced economies, both early in their policy modernization process and following the global financial crisis, are valuable in identifying desirable features of such frameworks. This paper draws on those lessons to provide guidance on key elements of effective monetary policy frameworks for LLMICs.
Download or read book Negative Interest Rate Policy NIRP written by Andreas Jobst and published by International Monetary Fund. This book was released on 2016-08-10 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: More than two years ago the European Central Bank (ECB) adopted a negative interest rate policy (NIRP) to achieve its price stability objective. Negative interest rates have so far supported easier financial conditions and contributed to a modest expansion in credit, demonstrating that the zero lower bound is less binding than previously thought. However, interest rate cuts also weigh on bank profitability. Substantial rate cuts may at some point outweigh the benefits from higher asset values and stronger aggregate demand. Further monetary accommodation may need to rely more on credit easing and an expansion of the ECB’s balance sheet rather than substantial additional reductions in the policy rate.
