Search results for "Monetary Policy"
showing 10 items of 105 documents
The Intraday Interest Rate: What's that?
2015
We study the intraday interest rate in a CCP-based GC pooling repo market and its key determinants. Since collateral used in this market is identical to collateral eligible for the daylight overdraft facility of the Eurosystem, any intraday rate in this market cannot be a result of collateral constraints keeping banks from using the overdraft for arbitrage. Nevertheless, we find that in the crisis period a statistically and economically significant intraday spread (up to 60 basis points) prevailed that was only somewhat mitigated by the ECB's unconventional monetary policy measures. Our results show that this spread was mainly determined by the market liquidity of the repo market, suggestin…
The response of Brent crude oil to the European central bank monetary policy
2022
Este artículo examina el impacto de las decisiones de política monetaria del Banco Central Europeo (BCE) sobre los precios del petróleo y la liquidez mediante un estudio de eventos con datos intradía. Analizamos el período de enero de 1999 a diciembre de 2020, que incluye la crisis financiera que comenzó en agosto de 2007. Nuestros resultados muestran una respuesta significativa de los rendimientos del petróleo solo durante la crisis financiera. Específicamente, encontramos que los rendimientos de los futuros de petróleo crudo Brent respondieron negativamente a variaciones inesperadas en la prima de riesgo italiana como medida de acciones de política monetaria no convencionales, y positivam…
Regional Asymmetric Reactions to Shocks in EMU: an Assessment of Different Approaches
2002
In recent years there has been an increasing research effort in estimating regional asymmetric shocks and assessing their importance within the European Monetary Union (EMU). In this chapter we offer an evaluation of the different approaches by distinguishing them according to methodological underpinnings, variables used and pitfalls and potential extensions of the analysis. The structure of this contribution is the following. In section 2 we discuss the relative importance of asymmetric shocks and the main problems connected with their measurement. In section 3 we focus on the explanatory variables which are assumed to determine the asymmetric reaction to shocks and distinguish between sec…
The Taylor Rule and the Practice of Central Banking
2010
The Taylor rule has revolutionized the way many policymakers at central banks think about monetary policy. It has framed policy actions as a systematic response to incoming information about economic conditions, as opposed to a period-by-period optimization problem. It has emphasized the importance of adjusting policy rates more than one-for-one in response to an increase in inflation. And, various versions of the Taylor rule have been incorporated into macroeconomic models that are used at central banks to understand and forecast the economy. This paper examines how the Taylor rule is used as an input in monetary policy deliberations and decision-making at central banks. The paper characte…
Harvard meets the crisis: U.S. fiscal policy in the 1930s and the political economy of Lauchlin B. Currie, Jacob Viner, John H. Williams and Harry D.…
2010
The paper aims to describe the contribution of four Harvard economists to the interpretation of the Great Depression and the policy decision making from 1933 to 1938. Lauchlin B. Currie, Jacob Viner, John H. Williams, Harry D. White, eminent scholars in the field of monetary and international economics, were deeply involved in policy decisions during the New Deal. In our synoptic analysis we will benefit from extensive scholarly work that has been provided in the last few years. We shall examine the extensive biographical connection between Currie, Viner, White and Williams with special regard to their common training at Harvard. Then we shall compare their interpretations of the causes of …
Active monetary policy and instability in a phillips curve system
1998
The presence of nonlinearities in a Phillips curve system yields to complex dynamics, i.e., cyclical behavior that may (under some parametric set) become chaotic. This paper extends these conclusions by including an active monetary policy. We show how stabilization policy may lead to amplified instabilities and that agents' expectations tend to play a key role in the amount of these instabilities.
Sticky-Price Models and the Natural Rate Hypothesis
2005
A major criticism of standard specifications of price adjustment in models for monetary policy analysis is that they violate the natural rate hypothesis by allowing output to differ from potential in steady state. In this paper we estimate a dynamic optimizing business cycle model whose price-setting behavior satisfies the natural rate hypothesis. The price-adjustment specifications we consider are the sticky-information specification of Mankiw and Reis (2002) and the indexed contracts of Christiano, Eichenbaum, and Evans (2005). Our empirical estimates of the real side of the economy are similar whichever price adjustment specification is chosen. Consequently, the alternative model specifi…
Rethinking Monetary Policy in the Framework of Inclusive and Sustainable Growth
2021
The 2030 Agenda for Sustainable Development places equality and sustainability at the centre of policy agendas. Nowadays, socially inclusive and environmentally sustainable economic growth is a central priority of public policy for most governments worldwide. Based on the theoretical and conceptual frameworks of inclusive growth and sustainable growth, we focus on monetary policy as a powerful macroeconomic policy tool connected with distributional and environmental issues. We deal with how high levels in income and wealth inequality, on the one hand, and shocks related to environmental degradation and climate change, on the other hand, it might have substantial implications for the conduct…
Do Exchange-Rate Regimes Matter for Monetary-Policy Autonomy? The Experiences of 11 Small, Open European Economies in the 1980s and 1990s
2003
We investigate monetary-policy autonomy under different exchange-rate regimes in small, open European economies during the 1980s and 1990s. We find no systematic difference in the degree of nominal monetary-policy autonomy enjoyed by those countries that pursue flexible exchange-rate regimes as compared to those that have kept their exchange rates fixed. Our interpretation of the results is that over the medium and long term following an 'independent' target for monetary policy, which does not deviate much from the targets of those countries to which one is closely financially integrated, is as constraining as locking the exchange rate to some particular level.
Systèmes financiers et canaux de transmission de la politique monétaire
2010
This dissertation analyses the consequences of transformations in the financial sphere on the transmission channels of decisions in monetary policy in industrialized countries over the past several years. We observe that as a result of these transformations, banking institutions have evolved from an originate to hold model to an originate to distribute model. This has enabled banks to turn more toward derivative products and credit risk transfer instruments. We demonstrate that these techniques of active/passive management have completely revolutionized the theoretical foundations of traditional channels and in particular the credit channel. Our analysis of these landmark changes is organiz…