scholarly journals Is there a Trade-Off between Inflation and Output Stabilization?

2013 ◽  
Vol 5 (2) ◽  
pp. 1-31 ◽  
Author(s):  
Alejandro Justiniano ◽  
Giorgio E Primiceri ◽  
Andrea Tambalotti
Keyword(s):  
Monetary Policy ◽  
Market Power ◽  
Optimal Policy ◽  
Economic Fluctuations ◽  
Dsge Model ◽  
Trade Off ◽  
Equilibrium Behavior ◽  
Us Economy ◽  
Output Stabilization ◽  
The Us

We find that the answer is no in an estimated DSGE model of the US economy in which exogenous movements in workers' market power are not a major driver of observed economic fluctuations. If they are, the tension between the conflicting stabilization objectives of monetary policy increases, but with negligible effects on the equilibrium behavior of the economy under optimal policy. (JEL E12, E23, E24, E31, E32, E52)

scholarly journals Welfare-Based Monetary Policy Rules in an Estimated DSGE Model of the Us Economy

2006 ◽  
Author(s):  
Michel Juillard ◽  
Philippe Karam ◽  
Douglas Laxton ◽  
Paolo A. Pesenti
Keyword(s):  
Monetary Policy ◽  
Dsge Model ◽  
Policy Rules ◽  
Monetary Policy Rules ◽  
Us Economy ◽  
The Us

scholarly journals The Empirical Implications of the Interest-Rate Lower Bound

2017 ◽  
Vol 107 (7) ◽  
pp. 1971-2006 ◽  
Author(s):  
Christopher Gust ◽  
Edward Herbst ◽  
David López-Salido ◽  
Matthew E. Smith
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Lower Bound ◽  
Bayesian Methods ◽  
Dsge Model ◽  
Slow Recovery ◽  
Us Economy ◽  
The Us ◽  
The Interest Rate ◽  
Empirical Implications

Using Bayesian methods, we estimate a nonlinear DSGE model in which the interest-rate lower bound is occasionally binding. We quantify the size and nature of disturbances that pushed the US economy to the lower bound in late 2008 as well as the contribution of the lower bound constraint to the resulting economic slump. We find that the interest-rate lower bound was a significant constraint on monetary policy that exacerbated the recession and inhibited the recovery, as our mean estimates imply that the zero lower bound (ZLB) accounted for about 30 percent of the sharp contraction in US GDP that occurred in 2009 and an even larger fraction of the slow recovery that followed. (JEL C11, C32, E12, E23, E32, E43, E52, G01)

CHALLENGES OF DEVELOPMENT OF AN ANTI-CRISIS STRATEGY TO OVERCOME THE CORONOVIRUS PANDEMIC AND ITS CONSEQUENCES

2020 ◽  
pp. 68-83
Author(s):  
Elena Lutskaya ◽  
Keyword(s):  
Monetary Policy ◽  
Federal Reserve ◽  
Financial System ◽  
Global Markets ◽  
Federal Reserve System ◽  
Us Economy ◽  
The Us ◽  
Reserve System

The article examines the views of Western researchers on overcoming the COVID-19 crisis and its consequences. The main focus is on the monetary policy of the Federal Reserve system - the most developed financial system that affects both the US economy and global markets.

scholarly journals Stock Market Conditions and Monetary Policy in an DSGE Model for the US

2010 ◽  
Author(s):  
Efrem Castelnuovo ◽  
Salvatore Nistico
Keyword(s):  
Monetary Policy ◽  
Stock Market ◽  
Dsge Model ◽  
Market Conditions ◽  
The Us

scholarly journals Technology Shocks and Monetary Policy in an Estimated Sticky Price Model of the US Economy

2005 ◽  
Author(s):  
Sanvi Avouyi-Dovi ◽  
Julien Matheron
Keyword(s):  
Monetary Policy ◽  
Technology Shocks ◽  
Price Model ◽  
Us Economy ◽  
The Us

scholarly journals The Federal Reserve Banks New Monetary Policy Tool

2012 ◽  
Vol 10 (9) ◽  
pp. 533
Author(s):  
David Gordon
Keyword(s):  
Monetary Policy ◽  
Federal Reserve ◽  
Vital Role ◽  
Open Market ◽  
Federal Reserve Bank ◽  
Us Economy ◽  
Policy Tool ◽  
Reserve Bank ◽  
The Us ◽  
Demand Deposit

The Federal Reserve Bank (FED) plays a vital role in the US economy. The roles and functions of the Fed are discussed here. This paper also offers an explanation of the traditional tools the Fed uses to conduct monetary policy. Open market operations are explained. The important role of the discount rate is discussed. The legally required reserve ratios are also explored. This author believes that the Fed has recently created a new tool. This tool is the payment of interest on demand deposit accounts at the Fed. This new tool is explained and its ramifications explored. The functions of monetary policy are also expanded upon in this paper.

scholarly journals Fiscal Foundations of Inflation: Imperfect Knowledge

2018 ◽  
Vol 108 (9) ◽  
pp. 2551-2589 ◽  
Author(s):  
Stefano Eusepi ◽  
Bruce Preston
Keyword(s):  
Monetary Policy ◽  
Public Debt ◽  
Wealth Effects ◽  
Inflation Expectations ◽  
Ricardian Equivalence ◽  
The Public ◽  
Us Economy ◽  
The Us ◽  
Imperfect Knowledge ◽  
Consumption Demand

This paper proposes a theory of the fiscal foundations of inflation based on imperfect knowledge and learning. Because imperfect knowledge breaks Ricardian equivalence, the scale and composition of the public debt matter for inflation. High and moderate duration debt generates wealth effects on consumption demand that impairs the intertemporal substitution channel of monetary policy: aggressive monetary policy is required to anchor inflation expectations. Counterfactual experiments conducted in an estimated model reveal that the US economy would have been substantially more volatile over the Great Inflation and Great Moderation periods if US debt levels had been those observed in Italy or Japan. (JEL D84, E31, E32, E52, E62, H63)

scholarly journals FINANCIAL SECTOR INTERCONNECTEDNESS AND MONETARY POLICY TRANSMISSION

2018 ◽  
Vol 23 (3) ◽  
pp. 1074-1101
Author(s):  
Alessandro Barattieri ◽  
Maya Eden ◽  
Dalibor Stevanovic
Keyword(s):  
Monetary Policy ◽  
Vector Autoregression ◽  
The United States ◽  
Structural Vector Autoregression ◽  
Net Worth ◽  
Financial Variables ◽  
Us Economy ◽  
The Us ◽  
Policy Shocks ◽  
Using Data

We present a stylized model that illustrates how interbank trading can reduce the sensitivity of lending to entrepreneurs' net worth, thus affecting the transmission mechanism of monetary policy through the credit channel. We build a model-consistent measure of interconnectedness and document that, in the United States, this measure has increased substantially during the period 1952–2016. Finally, interacting the measure of interconnectedness in a structural vector autoregression and a factor-augmented vector autoregression for the US economy, we find that the impulse responses of several real and financial variables to monetary policy shocks are dampened as interconnectedness increases. We confirm the same result using data from 10 Euro area countries for the period 1999–2016.

scholarly journals The Aftermath of the Tariff War on China

2020 ◽  
Vol 16 (2) ◽  
pp. 22
Author(s):  
Nicholas Bitar
Keyword(s):  
Monetary Policy ◽  
Positive Impact ◽  
New Keynesian ◽  
Us Economy ◽  
The Us ◽  
Short Run ◽  
The Interest Rate ◽  
Positive Effect ◽  
Shed Light ◽  
Trump Administration

Will the US sustain its economy after the tariff war with China, or will the economy regress? This paper offers a conceptual framework, based on the tenets of New-Keynesian theory, to answer this question. I anticipate that the tariff will have a positive effect on the GDP of the US economy in the short run while prices will rise. When adding the most recent reforms of interest cut by the Fed to 1.75% in September (2019) the model concludes a better outcome. Followed by an expansionary monetary policy by reducing the interest rate, the aftermath of the tariff war on China seems to have a positive impact on the US income and productivity. Obviously, some critics to the Trump Administration indeed shed light on the curtailed global and US social welfare that is caused by the inflationary effect of the tariff war, in addition to the deteriorating conditions for some trading sectors in the US which would certainly lead to unemployment. But the benefits to the US economy that are translated by the New-Keynesian theoretical framework show a positive impact on US production, employment, and GDP.

Does the US economy face a long run trade off between inflation and unemployment

2019 ◽  
Vol 12 (2) ◽  
pp. 118 ◽  
Author(s):  
Jamil Sayeed ◽  
Md. Deen Islam ◽  
Shanjida Yasmin
Keyword(s):  
Trade Off ◽  
Us Economy ◽  
Long Run ◽  
The Us
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