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Working Paper
Optimized Taylor Rules for Disinflation When Agents are Learning
Highly volatile transition dynamics can emerge when a central bank disinflates while operating without full transparency. In our model, a central bank commits to a Taylor rule whose form is known but whose coefficient are not. Private agents learn about policy parameters via Bayesian updating. Under McCallum's (1999) timing protocol, temporarily explosive dynamics can arise, making the transition highly volatile. Locally-unstable dynamics emerge when there is substantial disagreement between actual and perceived feedback parameters. The central bank can achieve low average inflation, but its ...
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Optimal disinflation under learning
Highly volatile transition dynamics can emerge when a central bank disinflates while operating without full transparency. In our model, a central bank commits to a Taylor rule whose form is known but whose coefficients are not. Private agents learn about policy parameters via Bayesian updating. Under McCallum?s (1999) timing protocol, temporarily explosive dynamics can arise, making the transition highly volatile. Locally unstable dynamics emerge when there is substantial disagreement between actual and perceived feedback parameters. The central bank can achieve low average inflation, but its ...
Working Paper
Arepas are not Tacos: On the Labor Markets of Latin America
This paper examines labor markets across Latin American countries, revealing substantial differences in unemployment, informality, and worker transitions. Using surveys from eight countries, we construct comparable statistics on employment stocks and mobility patterns. Notable cross-country differences emerge, with economies mostly clustered into high unemployment-low informality or low unemployment-high informality groups. Transition probabilities and directional flows also vary significantly. We highlight the importance of using country-specific parameters when simulating labor market and ...