This paper considers optimal monetary stabilization policy under flexible exchange rates in a model where exchange rate expectations are generated regressively. The analysis highlights the intimate relationship that exists between: (a) the direction of the optimal monetary feedback rule, (b) the amount...
international policy cooperationThis chapter studies optimal monetary stabilization policy in interdependent open economies, by proposing a unified analytical framework systematizing the existing literature. In the model, the combination of complete exchange-rate pass-through ('producer currency pricing') and...
We approximate the model around the optimal steady state as the long-run policy target. Optimal monetary policy is characterized by stabilization of the nominal interest rate instead of inflation stabilization as the predominant principle.doi:10.1016/j.jedc.2007.10.009Matthias Paustian...
In this chapter, we derive optimal monetary policy when the central bank minimizes welfare losses arising from price dispersion among different goods. We show that welfare losses can be captured by a quadratic loss function as second order Taylor approxi
Teruyoshi Kobayashi."Optimal Monetary Policy and the Role of Hybrid Inflation-Price-Level Targets". Applied Economics . 2005Teruyoshi Kobayashi, 2005. " Optimal monetary policy and the role of hybrid inflation-price-level targets ," Applied Economics , Taylor & Francis Journals, vol. 37(18), ...
Curdia, Vasco (2007), "Optimal Monetary Policy under sudden stops," Federal Reserve Bank of New York Staff Report No. 278.Cu´rdia, Vasco, "Optimal Monetary Policy under Sudden Stops," Staff Report no. 323, Federal Reserve Bank of New York, April 2008....
MONETARY policyCOST of living wage adjustmentsThis note shows that delegation of policy to a central banker who puts more weight on inflation stabilization than does the rest of society could reduce the alleged social inefficiency of private wage indexation decisions that arises in models of ...
consistent with the full stabilization of output and in‡ation. Thus, we explore optimal monetary policy under the assumption that the policy maker can credibly commit to a policy rule derived from the minimization of a social welfare function. The loss function balances, along with sectoral in...
The optimal control approach to monetary policy has garnered increased attention in recent years. Optimal control policies, however, are designed for the specific features of a particular model and therefore may not be robust to model misspecification. One important source of potential misspecification ...
“Fiscal Arrangements in a Monetary Union—Some Evidence from the United States.” In Don Fair and Christian de Boissieu (eds),Fiscal Policy, Taxes and the Financial System in an Increasingly Integrated Europe, Deventer: Kluwer Pub. Co. von Hagen, Jürgen and Manfred J.M. Neumann (1994) “...