Consumption Demand and Wealth Effects of Unorthodox Monetary Policy

2013 ◽  
Author(s):  
Georg Erber
Keyword(s):  
Monetary Policy ◽  
Wealth Effects ◽  
Consumption Demand

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)

Wealth effects of open market operations and optimal monetary policy

1986 ◽  
Vol 17 (2) ◽  
pp. 225-238 ◽  
Author(s):  
Michael Dotsey
Keyword(s):  
Monetary Policy ◽  
Wealth Effects ◽  
Open Market ◽  
Optimal Monetary Policy

Overvaluation in Australian Housing and Equity Markets: Wealth Effects or Monetary Policy?*

2010 ◽  
Vol 86 (275) ◽  
pp. 465-485 ◽  
Author(s):  
RENÉE A. FRY ◽  
VANCE L. MARTIN ◽  
NICHOLAS VOUKELATOS
Keyword(s):  
Monetary Policy ◽  
Equity Markets ◽  
Wealth Effects

Monetary Policy, Wealth Effects and Housing

2012 ◽  
pp. 317-325
Author(s):  
J. Muellbauer
Keyword(s):  
Monetary Policy ◽  
Wealth Effects

scholarly journals Lumpy Durable Consumption Demand and the Limited Ammunition of Monetary Policy

2019 ◽  
Author(s):  
Alisdair McKay ◽  
Johannes Wieland
Keyword(s):  
Monetary Policy ◽  
Durable Consumption ◽  
Consumption Demand

scholarly journals House prices and monetary policy

2016 ◽  
Vol 20 (3) ◽  
Author(s):  
Paulo Brito ◽  
Giancarlo Marini ◽  
Alessandro Piergallini
Keyword(s):  
Monetary Policy ◽  
Overlapping Generations ◽  
Multiple Equilibria ◽  
House Prices ◽  
Heteroclinic Orbit ◽  
Wealth Effects ◽  
Global Dynamics ◽  
Housing Wealth ◽  
Rational Bubbles ◽  
Housing Wealth Effects

AbstractThis paper analyzes global dynamics in an overlapping generations general equilibrium model with housing-wealth effects. It demonstrates that monetary policy cannot burst rational bubbles in the housing market. Under monetary policy rules of the Taylor-type, there exist global self-fulfilling paths of house prices along a heteroclinic orbit connecting multiple equilibria. From bifurcation analysis, the orbit features a boom (bust) in house prices when monetary policy is more (less) active. The paper also proves that booms or busts cannot be ruled out by interest-rate feedback rules responding to both inflation and house prices.

Housing, Wealth Effects, and Monetary Policy

2013 ◽  
Vol 42 (1) ◽  
pp. 55-71
Author(s):  
Kwang Hwan Kim ◽  
Munechika Katayama
Keyword(s):  
Monetary Policy ◽  
Wealth Effects ◽  
Housing Wealth ◽  
Housing Wealth Effects

ON THE MACROECONOMIC AND WEALTH EFFECTS OF UNCONVENTIONAL MONETARY POLICY

2016 ◽  
Vol 21 (5) ◽  
pp. 1189-1204 ◽  
Author(s):  
Fredj Jawadi ◽  
Ricardo M. Sousa ◽  
Raffaella Traverso
Keyword(s):  
Growth Rate ◽  
Monetary Policy ◽  
Central Bank ◽  
Stock Prices ◽  
Asset Prices ◽  
Housing Prices ◽  
Wealth Effects ◽  
Unconventional Monetary Policy ◽  
Substantial Impact ◽  
Bank Reserves

This paper focuses on the macroeconomic and wealth effects of unconventional monetary policy. To this end, we estimate a Bayesian structural vector autoregression (B-SVAR) using U.S. monthly data for the post-Lehman Brothers' collapse period. We show that a positive shock to the growth rate of central bank reserves does not have a substantial impact on industrial production or consumer prices. However, it also gives a strong boost to asset prices, which is larger in magnitude for stock prices than for housing prices. Thus, unconventional monetary policy typically operates via portfolio-rebalancing effects. A VAR counterfactual exercise confirms the role of the shocks to the growth rate of central bank reserves in explaining the dynamics of the variables included in the system, especially in the case of asset prices. Finally, additional empirical assessments uncover an important change in the conduct of monetary policy from “standard” to “exceptional” times and the suitability of our model to capture such a structural transformation.

scholarly journals Lumpy Durable Consumption Demand and the Limited Ammunition of Monetary Policy

2021 ◽  
Author(s):  
Alisdair McKay ◽  
Johannes F. Wieland
Keyword(s):  
Monetary Policy ◽  
Durable Consumption ◽  
Consumption Demand

scholarly journals Monetary policy and wealth effects with international income transfers

2018 ◽  
Vol 57 ◽  
pp. 210-230 ◽  
Author(s):  
Lucio D’Aguanno
Keyword(s):  
Monetary Policy ◽  
Wealth Effects ◽  
Income Transfers
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