Credible Commitment To Optimal Escape From A Liquidity Trap
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Credible Commitment To Optimal Escape From A Liquidity Trap
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Author : Mr.Olivier Jeanne
language : en
Publisher: International Monetary Fund
Release Date : 2004-09-01
Credible Commitment To Optimal Escape From A Liquidity Trap written by Mr.Olivier Jeanne and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004-09-01 with Business & Economics categories.
An independent central bank can manage its balance sheet and its capital so as to commit itself to a depreciation of its currency and an exchange rate peg. This way, the central bank can implement the optimal escape from a liquidity trap, which involves a commitment to higher future inflation. This commitment mechanism works even though, realistically, the central bank cannot commit itself to a particular future money supply. It supports the feasibility of Svensson's Foolproof Way to escape from a liquidity trap.
Credible Commitment To Optimal Escape From A Liquidity Trap
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Author : Olivier Jeanne
language : en
Publisher:
Release Date : 2006
Credible Commitment To Optimal Escape From A Liquidity Trap written by Olivier Jeanne and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with categories.
An independent central bank can manage its balance sheet and its capital so as to commit itself to a depreciation of its currency and an exchange rate peg. This way, the central bank can implement the optimal escape from a liquidity trap, which involves a commitment to higher future inflation. This commitment mechanism works even though, realistically, the central bank cannot commit itself to a particular future money supply. It supports the feasibility of Svensson`s Foolproof Way to escape from a liquidity trap.
Escaping From A Liquidity Trap And Deflation
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Author : Lars E. O. Svensson
language : en
Publisher:
Release Date : 2003
Escaping From A Liquidity Trap And Deflation written by Lars E. O. Svensson and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2003 with Deflation (Finance) categories.
"Existing proposals to escape from a liquidity trap and deflation, including my Foolproof Way,' are discussed in the light of the optimal way to escape. The optimal way involves three elements: (1) an explicit central-bank commitment to a higher future price level; (2) a concrete action that demonstrates the central bank's commitment, induces expectations of a higher future price level and jump-starts the economy; and (3) an exit strategy that specifies when and how to get back to normal. A currency depreciation is a direct consequence of expectations of a higher future price level and hence an excellent indicator of those expectations. Furthermore, an intentional currency depreciation and a crawling peg, as in the Foolproof Way, can implement the optimal way and, in particular, induce the desired expectations of a higher future price level. I conclude that the Foolproof Way is likely to work well for Japan, which is in a liquidity trap now, as well as for the euro area and the United States, in case either would fall into a liquidity trap in the future"--NBER website
Credible Commitment To Optimal Escape From A Liquidity Trap
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Author : Olivier Jeanne
language : en
Publisher:
Release Date : 2004
Credible Commitment To Optimal Escape From A Liquidity Trap written by Olivier Jeanne and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004 with Bank liquidity categories.
Monetary Economics
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Author : Steven Durlauf
language : en
Publisher: Springer
Release Date : 2016-04-30
Monetary Economics written by Steven Durlauf and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016-04-30 with Performing Arts categories.
Specially selected from The New Palgrave Dictionary of Economics 2nd edition, each article within this compendium covers the fundamental themes within the discipline and is written by a leading practitioner in the field. A handy reference tool.
Deep Freeze
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Author : Philipp Bagus
language : en
Publisher: Ludwig von Mises Institute
Release Date : 2011-04-01
Deep Freeze written by Philipp Bagus and has been published by Ludwig von Mises Institute this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011-04-01 with categories.
It was a modern thriving economy one day, and then, suddenly, the food disappeared from the shelves, the banks closed, and the ships stopped arriving. Iceland in 2008 experienced an unprecedented economic meltdown that struck fear in the hearts of people all over the world. If it could happen here, it could happen anywhere. The economic crisis led to a political crisis, with resignations galore. The whining and wailing about the disaster continues to this day, with most commentators blaming deregulation and the free market. In Deep Freeze, economists Philipp Bagus and David Howden demonstrate that the real cause of the calamity was bad central bank policy. Rates were way too low, banks were too big to fail, housing was implicitly guaranteed, and banks were borrowing short term from abroad to finance long term bonds. The authors discuss the implications of this maturity mismatching and zero in on the central bank policies that encouraged unsound practices. They demonstrate the cause and effect without a shadow of a doubt, using vast amounts of data and a detailed sector-by-sector look at the economy of Iceland. What they find is another instance of the Austrian Theory of the Business Cycle, working itself out in a way that is customized for a time and place. Toby Baxendale writes the introducton to this story that reads like a great novel. It serves as a reminder that central banking policies aren't just about monetary arcana. They affect our lives in profound and sometimes catastrophic ways. The Iceland Freeze is one of the great historical cases that makes Mises’s point. Let it always serve as a reminder of what happens when the laws of the market are papered over by politicians and central bankers. This account is likely to remain the definitive one for many years.
How To Fight Deflation In A Liquidity Trap
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Author : Mr. Gauti B. Eggertsson
language : en
Publisher: International Monetary Fund
Release Date : 2003-03-01
How To Fight Deflation In A Liquidity Trap written by Mr. Gauti B. Eggertsson and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2003-03-01 with Business & Economics categories.
I model deflation, at zero nominal interest rate, in a microfounded general equilibrium model. I show that deflation can be analyzed as a credibility problem if the government has only one policy instrument, money supply carried out by means of open market operations in short-term bonds, and cannot commit to future policies. I propose several policies to solve the credibility problem. They involve printing money or nominal debt and either (1) cutting taxes, (2) buying real assets such as stocks, or (3) purchasing foreign exchange. The government credibly "commits to being irresponsible" by using these policy instruments. It commits to higher money supply in the future so that the private sector expects inflation instead of deflation. This is optimal, since it curbs deflation and increases output by lowering the real rate of return.
Monetary And Economic Studies
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Author :
language : en
Publisher:
Release Date : 2006
Monetary And Economic Studies written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with Finance categories.
Monetary Policy Alternatives At The Zero Bound
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Author : Ben S. Bernanke
language : en
Publisher: www.bnpublishing.com
Release Date : 2009-03
Monetary Policy Alternatives At The Zero Bound written by Ben S. Bernanke and has been published by www.bnpublishing.com this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009-03 with categories.
The success over the years in reducing inflation and, consequently, the average level of nominal interest rates has increased the likelihood that the nominal policy interest rate may become constrained by the zero lower bound. When that happens, a central bank can no longer stimulate aggregate demand by further interest-rate reductions and must rely on "non-standard" policy alternatives. To assess the potential effectiveness of such policies, we analyze the behavior of selected asset prices over short periods surrounding central bank statements or other types of financial or economic news and estimate "noarbitrage" models of the term structure for the United States and Japan. There is some evidence that central bank communications can help to shape public expectations of future policy actions and that asset purchases in large volume by a central bank would be able to affect the price or yield of the targeted asset.
Bank Of Japan Monetary And Economic Studies
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Author :
language : en
Publisher:
Release Date : 2006
Bank Of Japan Monetary And Economic Studies written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with Finance categories.