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Keywords:prices OR Prices 

Working Paper
Exact utilities under alternative monetary rules in a simple macro model with optimizing agents

We construct an optimizing-agent model of a closed economy which is simple enough that we can use it to make exact utility calculations. There is a stabilization problem because there are one-period nominal contracts for wages, or prices, or both and shocks that are unknown at the time when contracts are signed. We evaluate alternative monetary policy rules using the utility function of the representative agent. Fully optimal policy can attain the Pareto-optimal equilibrium. Fully optimal policy is contrasted with both 'naive' and 'sophisticated' simple rules that involve, respectively, ...
International Finance Discussion Papers , Paper 635

Working Paper
Price-level determinacy, lower bounds on the nominal interest rate, and liquidity traps

We consider monetary-policy rules with inflation-rate targets and interest-rate or money-growth instruments using a flexible-price, perfect-foresight model. There is always a locally-unique target equilibrium. There may also be below-target equilibria (BTE) with inflation always below target and constant, asymptotically approaching or eventually reaching a below-target value, or oscillating. Liquidity traps are neither necessary nor sufficient for BTE which can arise if monetary policy keeps the interest rate above a lower bound. We construct monetary rules that preclude BTE when fiscal ...
International Finance Discussion Papers , Paper 795

Journal Article
Implications of structural changes in the U.S. economy for pricing behavior and inflation dynamics

Some key features of the behavior of inflation in the United States appear to have changed in the past 20 years, with potentially important implications for forecasters and policymakers. Recent studies have provided evidence of a decline in both the variability and persistence of inflation. ; Such shifts in the behavior or dynamics of inflation would necessitate changes in the economic relationships used by policymakers and economists to assess current conditions, forecast key economic indicators, and determine the implications of policy changes for future economic activity. ; Willis examines ...
Economic Review , Volume 88 , Issue Q I , Pages 5-27

Speech
The road to recovery: Hudson Valley

Remarks at the State University of New York at New Paltz, New Paltz, New York.
Speech , Paper 57

Working Paper
The cumulation of individual responses to input price changes

Working Paper Series / Economic Activity Section , Paper 113

Working Paper
A discrete model of discriminatory price auctions - an alternative to Menezes-Monteiro

Menezes and Monteiro, Math. Soc. Sci. (1995), show that a multi-unit discriminatory price auction does not have a pure strategy equilibrium unless one imposes some rather special conditions on the demand functions. This non-existence result might indicate a problem either with the underlying auction procedure (as Menezes and Monteiro suggest) or with the modelling approach (as we suggest). We observe that the non-existence problem disappears if bids must come in multiples of smallest units --- a realistic feature. Moreover, we show that most of the analysis can be recast in a discrete action ...
Finance and Economics Discussion Series , Paper 1998-08

Journal Article
Has the bond market forgotten oil?

Monetary Trends , Issue May

Working Paper
Biofuels impact on crop and food prices: using an interactive spreadsheet

This paper examines the effect that biofuels production has had on commodity and global food prices. The innovative contribution of this paper is the interactive spreadsheet that allows the reader to choose the assumptions behind the estimates. By allowing the reader to choose the country, time period, supply and demand elasticities, and the size of indirect effects we explicitly illustrate the sensitivity of the estimated effect of biofuels production on prices. Our best estimates suggest that the increase in biofuels production over the past two years has had a sizeable impact on corn, ...
International Finance Discussion Papers , Paper 967

Report
Price limits and volatility in soybean meal futures markets

Research Paper , Paper 8904

Report
A framework for identifying the sources of local currency price stability with an empirical application

The inertia of traded goods' local currency prices in the face of exchange rate changes is a well-documented phenomenon in the field of international economics. This paper develops a framework for identifying the sources of local currency price stability. The empirical approach exploits manufacturers' and retailers' first-order conditions, in conjunction with detailed information on the frequency of price adjustments in response to exchange rate changes, to quantify the relative importance of fixed costs of repricing, local-cost nontraded components, and markup adjustment by manufacturers and ...
Staff Reports , Paper 287

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