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Journal Article
Time-inconsistent monetary policies: recent research
This Economic Letter looks at time-inconsistency, describing why the same mechanisms that can lead to higher average inflation also can hamper policymakers' efforts to keep inflation stable.
Working Paper
The Optimal Degree of Monetary-Discretion in a New Keynesian Model with Private Information
This paper considers the optimal degree of monetary-discretion when the central bank conducts policy based on its private information about the state of the economy and is unable to commit. Society seeks to maximize social welfare by imposing restrictions on the central bank's actions over time, and the central bank takes these restrictions and the New Keynesian Phillips curve as constraints. By solving a dynamic mechanism design problem we find that it is optimal to grant ?constrained discretion? to the central bank by imposing both upper and lower bounds on permissible inflation, and that ...
Journal Article
Monetary policy and exchange rates in small open economies
Journal Article
Monetary policy, transparency, and credibility: conference summary
This Economic Letter summarizes the papers presented at a conference on "Monetary Policy, Transparency, and Credibility" held at the Federal Reserve Bank of San Francisco on March 23 and 24, 2007.
Journal Article
Interest rates and monetary policy: conference summary
This Economic Letter summarizes the papers presented at a conference on "Interest Rates and Monetary Policy" held at the Federal Reserve Bank of San Francisco on March 19 and 20, 2004, under the joint sponsorship of the Federal Reserve Bank of San Francisco and the Stanford Institute for Economic Policy Research. The papers are listed at the end and are available at http://www.frbsf.org/economics/conferences/0403/index.html
Journal Article
Finance and macroeconomics
This Economic Letter summarizes papers presented at the conference "Finance and Macroeconomics" held at the Federal Reserve Bank of San Francisco on February 28 and March 1, 2003, under the joint sponsorship of the Bank and the Stanford Institute for Economic Policy Research. The papers are listed at the end and are available at http://www.frbsf.org/economics/conferences/0303/index.html.
Journal Article
New Keynesian models and their fit to the data
In this Economic Letter, we discuss the basic properties of hybrid New Keynesian models and examine the extent to which they successfully explain U.S. macroeconomic data.
Working Paper
Learning and optimal monetary policy
To conduct policy efficiently, central banks must use available data to infer, or learn, the relevant structural relationships in the economy. However, because a central bank's policy affects economic outcomes, the chosen policy may help or hinder its efforts to learn. This paper examines whether real-time learning allows a central bank to learn the economy's underlying structure and studies the impact that learning has on the performance of optimal policies under a variety of learning environments. Our main results are as follows. First, when monetary policy is formulated as an optimal ...
Journal Article
Labor markets and the macroeconomy: conference summary
This Economic Letter summarizes the papers presented at a conference on "Labor Markets and the Macroeconomy" held at the Federal Reserve Bank of San Francisco on March 3 and 4, 2006.
Journal Article
Uncertainty and monetary policy
Since uncertainty is such an important issue for policymakers it should come as no surprise that economists have made a study of its various guises and developed formal techniques to help understand and mitigate its effects. In this Letter I discuss, in broad-brush terms, some of these techniques and their implications for the conduct of monetary policy.