Search Results
Working Paper
Inflation-targeting, price-path targeting and indeterminacy
In this paper, we examine the areas of indeterminacy in a flexible price RBC model with shopping time role for money and a central bank that uses an interest rate rule to target inflation and/or the price level. We present analytical results showing that, although inflation targeting often results in real indeterminacy, a price level target generally delivers a unique equilibrium for a relevant range of policy parameters.
Working Paper
The zero lower bound and the dual mandate
This article uses a DSGE framework to evaluate the role of monetary policy in determining the likelihood of encountering the zero lower bound. We find that the probability of experiencing episodes of being at zero lower bound depends almost exclusively on the monetary policy rule. A policy rule, such as the one proposed by Taylor (1993) which is based on the dual mandate is highly likely to lead to episodes of zero short-term interest rates if the central bank is not committed to its inflation target. Our results on nominal interest rate and inflation dynamics do not depend on the particular ...
Journal Article
Humphrey-Hawkins: the July monetary policy report
A review of the Federal Reserve System's July 1988 Monetary Policy Report to Congress, indicating a decline in the role of monetary aggregates in the policy process and including the Federal Open Market Committee's projection of economic conditions.
Journal Article
Available labor supply
Journal Article
The mechanics behind manufacturing job losses
Manufacturing jobs as a percentage of private employment has fallen by half?from about 21 percent in 1987 to less than 11 percent today. Yet, manufacturing output as a percentage of private output is cyclical with a fairly flat trend averaging about 14 percent.
Working Paper
In defense of zero inflation
An argument supporting zero inflation as the sole objective of monetary policy, with particular emphasis on the Bank of Canada's commitment to an explicit, low inflation target.
Journal Article
Price-level uncertainty and inflation targeting
In this paper, Dittmar, Gavin and Kydland make two points about commonly proposed rules for inflation targeting. First, they argue that there is a great deal of uncertainty about the price level and inflation inherent in current proposals to target inflation. They show that the degree to which the central bank cares about the real economy can have a large impact on price level (and inflation) uncertainty. They find that the magnitudes of uncertainty that prevailed across the G-10 throughout the last four decades are the expected consequence of commonly proposed inflation-targeting regimes. ...
Working Paper
The effects of disinflationary policies on monetary velocity
A study of the effect of disinflation policies on monetary velocity, which shows a systematic relation between unexpected changes in the money-income relationship and changes in the trends of inflation rates, and which concludes that the failure to commit to a stable price policy tends to destabilize the economy.
Journal Article
Consumer price inflation and housing prices
Journal Article
Comparing inflation expectations of households and economists: is a little knowledge a dangerous thing?
A comparison of the performance of forecasts by economists (the Livingston survey), households (the Michigan Survey of Consumer Finances), and a time series model (ARIMA).