Search Results
Report
Business cycle fluctuations and the distribution of consumption
De Giorgi, Giacomo; Gambetti, Luca
(2015-03-01)
This paper sheds new light on the interactions between business cycles and the consumption distribution. We use Consumer Expenditure Survey data and a factor model to characterize the cyclical dynamics of the consumption distribution. We first establish that our approach is able to closely match business cycle fluctuations of consumption from the National Account. We then study the responses of the consumption distribution to total factor productivity shocks and economic policy uncertainty shocks. Importantly, we find that the responses of the right tail of the consumption distribution, ...
Staff Reports
, Paper 716
Working Paper
Fiscal Stimulus with Learning-By-Doing
dAlessandro, Antonello; Fella, Giulio; Melosi, Leonardo
(2018-05-01)
Using a Bayesian SVAR analysis, we document that an increase in government purchases raises private consumption, the real wage and total factor productivity (TFP) while reducing inflation. Each of these facts is hard to reconcile with both neoclassical and New-Keynesian models. We extend a standard New-Keynesian model to allow for skill accumulation through past work experience, following Chang, Gomes and Schorfheide (2002). An increase in government spending increases hours and induces skill accumulation and higher measured TFP and real wages in subsequent periods. Future marginal costs fall ...
Working Paper Series
, Paper WP-2018-9
Working Paper
Optimal Inflation Target with Expectations-Driven Liquidity Traps
Coyle, Philip; Nakata, Taisuke
(2019-05-17)
In expectations-driven liquidity traps, a higher inflation target is associated with lower inflation and consumption. As a result, introducing the possibility of expectations-driven liquidity traps to an otherwise standard model lowers the optimal inflation target. Using a calibrated New Keynesian model with an effective lower bound (ELB) constraint on nominal interest rates, we find that even a very small probability of falling into an expectations-driven liquidity trap lowers the optimal inflation target nontrivially. Our analysis provides a reason to be cautious about the argument that ...
Finance and Economics Discussion Series
, Paper 2019-036
Working Paper
The Fiscal Theory of the Price Level in a World of Low Interest Rates
Cui, Wei; Bassetto, Marco
(2017-11-16)
A central equation for the fiscal theory of the price level (FTPL) is the government budget constraint (or "government valuation equation"), which equates the real value of government debt to the present value of fiscal surpluses. In the past decade, the governments of most developed economies have paid very low interest rates, and there are many other periods in the past in which this has been the case. In this paper, we revisit the implications of the FTPL in a world where the rate of return on government debt may be below the growth rate of the economy, considering different sources for ...
Working Paper Series
, Paper WP-2017-25
Journal Article
On the Mechanics of Fiscal Inflations
Bassetto, Marco; Benzoni, Luca; Hall, Jason
(2024-07-12)
The goal of this paper is twofold. First, we wish to better explain the relationship between Sargent and Wallace’s (1981) unpleasant monetarist arithmetic, the closely connected fiscal theory of the price level (FTPL), and the monetarist view of inflation. Second, we discuss how the recent inflationary episode has contributed to redistributing real resources from holders of government debt to the public purse. In particular, financial prices before the onset of the COVID pandemic suggest that investors viewed an inflationary shock such as the one we experienced as extremely unlikely, so the ...
Quarterly Review
, Volume 44
, Issue 2
Report
Liquidity Traps and Monetary Policy: Managing a Credit Crunch: Online Appendix
Nicolini, Juan Pablo; Buera, Francisco J.
(2017-02-02)
Staff Report
, Paper 541
Working Paper
A Promised Value Approach to Optimal Monetary Policy
Nakata, Taisuke; Hills, Timothy S.; Sunakawa, Takeki
(2018-12-03)
This paper characterizes optimal commitment policy in the New Keynesian model using a novel recursive formulation of the central bank's infinite horizon optimization problem. In our recursive formulation motivated by Kydland and Prescott (1980), promised inflation and output gap---as opposed to lagged Lagrange multipliers---act as pseudo-state variables. Using three well known variants of the model---one featuring inflation bias, one featuring stabilization bias, and one featuring a lower bound constraint on nominal interest rates---we show that the proposed formulation sheds new light on the ...
Finance and Economics Discussion Series
, Paper 2018-083
Working Paper
Government Debt Limits and Stabilization Policy
Young, Eric R.; Murphy, Daniel
(2020-07-31)
We evaluate alternative public debt management policies in light of constraints imposed by the effective lower bound on interest rates. Replacing the current limit on gross debt issued by the fiscal authority with a limit on consolidated debt of the government can ensure that output always reaches its potential, but it may permit excess government spending when the economy is away from the effective lower bound. The welfare-maximizing policy sets the gross debt limit to the level implied by Samuelson (1954), while the central bank finances government spending with money when the economy is at ...
Working Papers
, Paper 20-23
Working Paper
Fiscal Multipliers at the Zero Lower Bound: The Role of Policy Inertia
Hills, Timothy S.; Nakata, Taisuke
(2014-11-20)
The presence of the lagged shadow policy rate in the interest rate feedback rule reduces the government spending multiplier nontrivially when the policy rate is constrained at the zero lower bound (ZLB). In the economy with policy inertia, increased inflation and output due to higher government spending during a recession speed up the return of the policy rate to the steady state after the recession ends. This in turn dampens the expansionary effects of the government spending during the recession via expectations. In our baseline calibration, the output multiplier at the ZLB is 2.5 when the ...
Finance and Economics Discussion Series
, Paper 2014-107
Working Paper
Fiscal Expansions in the Era of Low Real Interest Rates
Garga, Vaishali
(2020-04-01)
Low natural real interest rates limit the power of monetary policy to revive the economy due to the zero lower bound (ZLB) on the nominal interest rate. Fiscal stabilization via higher government debt is frequently recommended as a policy to raise the natural real interest rate. This paper builds a non-Ricardian framework to study the tradeoffs associated with a debt-financed fiscal expansion and show that even in a low real interest rate environment, higher debt doesn’t necessarily raise the real interest rate. The effect of the expansion is non-monotonic: Increasing debt raises the ...
Working Papers
, Paper 20-11
FILTER BY year
FILTER BY Bank
Board of Governors of the Federal Reserve System (U.S.) 20 items
Federal Reserve Bank of Minneapolis 16 items
Federal Reserve Bank of St. Louis 9 items
Federal Reserve Bank of Chicago 7 items
Federal Reserve Bank of Dallas 7 items
Federal Reserve Bank of New York 7 items
Federal Reserve Bank of Boston 4 items
Federal Reserve Bank of Cleveland 4 items
Federal Reserve Bank of Kansas City 4 items
Federal Reserve Bank of San Francisco 4 items
Federal Reserve Bank of Philadelphia 2 items
Federal Reserve Bank of Richmond 1 items
show more (7)
show less
FILTER BY Series
Working Papers 21 items
Finance and Economics Discussion Series 18 items
Working Paper Series 11 items
Staff Report 10 items
Globalization Institute Working Papers 6 items
Research Working Paper 4 items
Liberty Street Economics 3 items
Staff Reports 3 items
Current Policy Perspectives 2 items
International Finance Discussion Papers 2 items
Review 2 items
Monograph 1 items
Quarterly Review 1 items
Working Paper 1 items
show more (9)
show less
FILTER BY Content Type
Working Paper 63 items
Report 15 items
Discussion Paper 3 items
Journal Article 3 items
Monograph 1 items
FILTER BY Author
Nakata, Taisuke 7 items
Nicolini, Juan Pablo 7 items
Andolfatto, David 5 items
Bassetto, Marco 5 items
Bhattarai, Saroj 5 items
Melosi, Leonardo 5 items
Bianchi, Francesco 4 items
Buera, Francisco J. 4 items
Lee, Jae Won 4 items
Yang, Choongryul 4 items
Barros, Fernando 3 items
Bi, Huixin 3 items
Gomes, Fabio 3 items
Kehoe, Timothy J. 3 items
Luduvice, Andre 3 items
Martin, Fernando M. 3 items
Park, Woong Yong 3 items
Pintus, Patrick A. 3 items
Wen, Yi 3 items
Xing, Xiaochuan 3 items
Amador, Manuel 2 items
Bianchi, Javier 2 items
Chib, Siddhartha 2 items
Copeland, Adam 2 items
Fleming, Michael J. 2 items
Foerster, Andrew 2 items
Glover, Andrew 2 items
Heathcote, Jonathan 2 items
Hills, Timothy S. 2 items
Infante, Sebastian 2 items
Jacobson, Margaret M. 2 items
Keane, Frank M. 2 items
Krueger, Dirk 2 items
Leeper, Eric M. 2 items
Miller, David S. 2 items
Preston, Bruce 2 items
Saravay, Zack 2 items
Sargent, Thomas J. 2 items
Shin, Minchul 2 items
Spewak, Andrew 2 items
Spiegel, Mark M. 2 items
Sunakawa, Takeki 2 items
Tan, Fei 2 items
Traum, Nora 2 items
Ueda, Kozo 2 items
Acharya, Sushant 1 items
Athreya, Kartik B. 1 items
Ayres, Joao Luiz 1 items
Ballance, Joshua 1 items
Barone, Jordan 1 items
Benzoni, Luca 1 items
Bullard, James B. 1 items
Campbell, Jeffrey R. 1 items
Cashin, David B. 1 items
Chaboud, Alain P. 1 items
Cotton, Christopher D. 1 items
Coyle, Philip 1 items
Cui, Wei 1 items
De Giorgi, Giacomo 1 items
Denison, Erin 1 items
Diercks, Anthony M. 1 items
Dogra, Keshav 1 items
Doh, Taeyoung 1 items
Dufresne, Lora 1 items
Egorov, Konstantin 1 items
Esquivel, Carlos 1 items
Fella, Giulio 1 items
Ferrero, Andrea 1 items
Ferris, Erin E. Syron 1 items
Fujiwara, Ippei 1 items
Gambetti, Luca 1 items
Garbade, Kenneth D. 1 items
Garcia, Marcio 1 items
Garga, Vaishali 1 items
Gennaro Caracciolo, Gherardo 1 items
Gonzalez-Astudillo, Manuel 1 items
Graves, Sebastian 1 items
Guillen, Diogo 1 items
Hall, Jason 1 items
Hrung, Warren B. 1 items
Katagiri, Mitsuru 1 items
Kavoussi, Cullen 1 items
Kehoe, Patrick J. 1 items
Kersting, Erasmus K. 1 items
Klee, Elizabeth C. 1 items
Kliesen, Kevin L. 1 items
Konishi, Hideki 1 items
Lopez, Jose A. 1 items
Macera, Manuel 1 items
Machicado, Carlos Gustavo 1 items
Marcet, Albert 1 items
Minoiu, Camelia 1 items
Mitchener, Kris James 1 items
Mithal, Radhika 1 items
Murphy, Daniel 1 items
Owens, Andrew 1 items
Peres-Cajías, José 1 items
Plante, Michael D. 1 items
Pradhan, Swapan-Kumar 1 items
Qing, Melanie 1 items
Richter, Alexander W. 1 items
Rios-Rull, Jose-Victor 1 items
Rottner, Matthias 1 items
Sarkar, Asani 1 items
Schwartzman, Felipe 1 items
Searls, Seth 1 items
Shen, Wenyi 1 items
Takáts, Előd 1 items
Temesvary, Judit 1 items
Waller, William 1 items
Wang, J. Christina 1 items
Yang, Shu-Chun S. 1 items
Young, Eric R. 1 items
Zarutskie, Rebecca 1 items
Zhao, Bo 1 items
Zlate, Andrei 1 items
Zubairy, Sarah 1 items
dAlessandro, Antonello 1 items
show more (113)
show less
FILTER BY Jel Classification
E52 43 items
E62 29 items
E58 22 items
E31 19 items
E32 15 items
E61 12 items
E21 11 items
H63 7 items
E44 6 items
E43 5 items
E51 5 items
D83 4 items
E65 4 items
F41 4 items
G12 4 items
N16 4 items
E22 3 items
E40 3 items
E41 3 items
E42 3 items
E5 3 items
E60 3 items
G14 3 items
G18 3 items
N10 3 items
C11 2 items
C15 2 items
C32 2 items
E30 2 items
E37 2 items
F42 2 items
F45 2 items
G21 2 items
G24 2 items
G32 2 items
N12 2 items
C3 1 items
C34 1 items
D12 1 items
D22 1 items
D72 1 items
D84 1 items
D90 1 items
E0 1 items
E12 1 items
E24 1 items
E25 1 items
E53 1 items
F31 1 items
F33 1 items
F34 1 items
F51 1 items
G0 1 items
G01 1 items
G1 1 items
G15 1 items
G38 1 items
H30 1 items
H6 1 items
H60 1 items
H62 1 items
H71 1 items
H72 1 items
I1 1 items
N14 1 items
show more (61)
show less
FILTER BY Keywords
Monetary policy 9 items
COVID-19 8 items
Fiscal policy 8 items
zero lower bound 8 items
fiscal policy 6 items
consumption 5 items
monetary policy 5 items
Liquidity trap 4 items
Ricardian equivalence 4 items
Zero lower bound 4 items
liquidity traps 4 items
Credit crunch 3 items
Federal Reserve 3 items
Fiscal theory of the price level 3 items
Government debt 3 items
Inflation 3 items
Markov-switching models 3 items
business cycles 3 items
inflation 3 items
interest rates 3 items
macroeconomic history 3 items
stabilization 3 items
Banking crisis 2 items
Bayesian inference 2 items
Capital tax rate 2 items
Capital-skill complementarity 2 items
Central bank independence 2 items
Collateral 2 items
Collateral constraints 2 items
Commitment 2 items
Debt crisis 2 items
Great depression 2 items
Helicopter drops 2 items
Inequality 2 items
Liquidity traps 2 items
Main Street Lending Program 2 items
Marginal likelihood 2 items
Monetary and fiscal policies 2 items
Monetary and fiscal policy interaction 2 items
Monetary-fiscal interactions 2 items
Off-budget transfers 2 items
Policy uncertainty 2 items
Redistribution 2 items
Regime-Switching Models 2 items
Treasury 2 items
Vaccination paths 2 items
Welfare implications 2 items
Zero Lower Bound 2 items
debt 2 items
determinacy 2 items
forward guidance 2 items
macroeconomic uncertainty 2 items
price level 2 items
sunspot shocks 2 items
unconventional monetary policy 2 items
Bank lending 1 items
Bayesian methods 1 items
Bolivia 1 items
Brazil hyperinflation 1 items
Brazil stagnation 1 items
CARES Act 1 items
COVID-19 pandemic 1 items
Central Bank 1 items
Competitive Devaluation 1 items
Confidence Recession 1 items
Credibility 1 items
Credible policy 1 items
Cross-border claims 1 items
Currency Crises 1 items
Debt 1 items
Debt accounting 1 items
Debt sustainability 1 items
Default risk 1 items
Deficits 1 items
Deflationary bias 1 items
Difference-in-differences 1 items
Distortionary financing 1 items
Dun & Bradstreet firm-level data 1 items
Effective Lower Bound 1 items
Emergency lending facilities 1 items
Employment stabilization policies 1 items
Endogenous Borrowing Constraints 1 items
Endogenous Collateral Constraints 1 items
Equilibrium Multiplicity 1 items
Eurozone 1 items
FAVAR 1 items
Fiscal Theory of the Price Level 1 items
Fiscal and monetary interactions 1 items
Fiscal deficit 1 items
Fiscal inflation 1 items
Fiscal policy transmission 1 items
Forward Guidance 1 items
Government budget 1 items
Government budget constraint 1 items
Government debt limits 1 items
Hiring costs 1 items
Hiring subsidies 1 items
Household heterogeneity 1 items
Hyperinflation 1 items
Idiosyncratic Risk 1 items
Inflation bias 1 items
Inflation expectations 1 items
Inflation targeting 1 items
Information sensitivity of debt 1 items
Interest rate normalization 1 items
Internal rationality 1 items
Labor market frictions 1 items
Labor supply 1 items
Liquidity 1 items
Liquidity Trap 1 items
Liquidity Traps 1 items
MCMC 1 items
Macroeconomic history 1 items
Markov-switching coefficients 1 items
Metropolis-Hastings 1 items
Monetary Fiscal Interaction 1 items
Monetary Union 1 items
Monetary fiscal interaction 1 items
Monetary union 1 items
Monetary-fiscal coordination 1 items
Monetary-fiscal policy mix 1 items
Monetary/fiscal interaction 1 items
Money premium 1 items
Multiple Equilibria 1 items
Multiple Equilibria. 1 items
Multipliers 1 items
New Keynesian 1 items
New Keynesian model 1 items
News Decomposition 1 items
Nominal anchor 1 items
Occasionally binding constraints 1 items
Optimal Inflation Target 1 items
Optimal policy 1 items
PPP 1 items
PPPLF 1 items
Price Level Determination 1 items
Price level determination 1 items
Public enterprises 1 items
Ramsey plans 1 items
Random blocks 1 items
Re-use 1 items
Redistribution Shocks 1 items
Rehypothecation 1 items
Repo 1 items
Ricardian 1 items
Seigniorage 1 items
Self-Fulfilling Equilibria 1 items
Stabilization bias 1 items
Stabilization plans 1 items
State-Contingent Loan Repayment 1 items
Stochastic volatility. 1 items
Stock Market 1 items
Storage 1 items
Student-t shocks 1 items
Sudden inflation 1 items
Sustainable Plan 1 items
TARGET2 1 items
Tailored 1 items
Tailored proposal densities 1 items
Taylor rule 1 items
Time-Consistency 1 items
Time-varying volatility 1 items
Transfer multiplier 1 items
Transition dynamics 1 items
Treasuries 1 items
Treasury securities 1 items
Uncertainty 1 items
Variable-Rate Loans 1 items
Welfare evaluation 1 items
World Interest Rate 1 items
aggregate shocks 1 items
asymmetric rules 1 items
bank lending 1 items
budget stabilization funds 1 items
clearing 1 items
collateral 1 items
collateral constraints 1 items
coordination 1 items
costs of business cycles 1 items
credit channel 1 items
crisis 1 items
dealer 1 items
dealers 1 items
deficit 1 items
disanchoring of inflation expectations 1 items
distortionary taxation 1 items
emergency budget 1 items
equilibrium determinacy 1 items
expectations 1 items
federal debt 1 items
federal deficit 1 items
financial crisis 1 items
financial frictions 1 items
fiscal multipliers 1 items
government spending 1 items
government spending multipliers 1 items
heterogeneity 1 items
incomplete markets 1 items
inefficiency 1 items
inequality 1 items
inflation feedback 1 items
inflation persistence 1 items
inflation targeting 1 items
interaction of fiscal and monetary policy 1 items
interest rate channel 1 items
interest rate smoothing 1 items
international comovement 1 items
lenders of last resort 1 items
liquid bonds 1 items
liquidity facilities 1 items
monetary and fiscal policy 1 items
monetary-fiscal policy interactions 1 items
natural rates 1 items
nominal debt 1 items
non-linear DSGE models 1 items
opportunistic reflation 1 items
optimal policy 1 items
production friction 1 items
rainy day funds 1 items
re-use 1 items
real wage 1 items
rehypothecation 1 items
relationship lending 1 items
reputation 1 items
revenue cyclicality 1 items
safe assets 1 items
sectoral reallocation 1 items
settlement 1 items
shock-specific policy rules 1 items
small business 1 items
sovereign bond markets 1 items
stabilization policy 1 items
structural factor model 1 items
sustainable plan 1 items
term premium 1 items
time consistency 1 items
trigger strategy 1 items
uncertainty 1 items
welfare 1 items
show more (234)
show less