Essays On Inflation Stabilization In A Small Open Economy
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Essays On Inflation Stabilization In A Small Open Economy
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Author : Hyuk-jae Rhee
language : en
Publisher:
Release Date : 2003
Essays On Inflation Stabilization In A Small Open Economy written by Hyuk-jae Rhee and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2003 with Developing countries categories.
Inflation And Employment In Open Economies
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Author : Assar Lindbeck
language : en
Publisher: North-Holland
Release Date : 1979
Inflation And Employment In Open Economies written by Assar Lindbeck and has been published by North-Holland this book supported file pdf, txt, epub, kindle and other format this book has been release on 1979 with Business & Economics categories.
Essays On Monetary And Fiscal Policy Interactions In Small Open Economies
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Author : Thitima Chucherd
language : en
Publisher:
Release Date : 2013
Essays On Monetary And Fiscal Policy Interactions In Small Open Economies written by Thitima Chucherd and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with Fiscal policy categories.
This thesis addresses interactions between monetary and fiscal policies in a theoretical dynamic stochastic general equilibrium (DSGE) model of a small open economy and in an empirical model under a structural vector error correction model (SVECM). The thesis consists of three essays. The contribution is both theoretical and empirical that enables a better understanding of the complexity of interactions between monetary and fiscal policies in small open economies. The first essay examines the equilibrium determinacy under monetary and fiscal rules. The goal is to investigate how monetary and fiscal policy interactions ensure a unique and non-explosive (determinate) equilibrium for a small open economy. The study focuses when policy makers implement a set of policy mixes to address domestic output price inflation control for monetary policy, debt stabilization for fiscal policy, and joint output stabilization tasks. The result indicates that two policy schemes facilitate a determinate equilibrium. First, monetary policy actively controls inflation when fiscal policy sets a sufficient feedback on debt. Second, monetary policy becomes passive against inflation when fiscal policy is insolvent. Adding output stabilization to each rule simply causes variants of this fundamental. An interest rate rule with output stabilization can be more passive against inflation while providing a stronger response to the output gap. Fiscal policy is required to set higher feedback on debt along with its stronger counter-cyclical policy. The second essay links between the equilibrium determinacy and policy optimization. This essay provides insights into the design of policy mixes and compares determinacy outcomes between two theoretical models of a small open economy: with and without an explicit exchange rate role. This study shows that policy interactions in a small open economy with an endogenous exchange rate is quite sophisticated, especially when a monetary rule is added with an output stabilization task and/or targeted to Consumer Price Index (CPI) inflation. Additional concern for monetary policy in an open economy causes a partial offset to its reaction on domestic output price inflation that weakens its effect on the real debt burden. To minimize economic fluctuations, policy makers should mute the role of output stabilization for monetary policy, and set minimum feedback on debt that is compatible with the degree of counter-cyclical fiscal policy. Substantially active response to inflation is satisfactory for monetary policy with CPI inflation targeting. The third essay empirically presents monetary and fiscal policy interactions in Thailand's SVECM suggested by a theoretical DSGE model developed from the previous essays. This essay shows that the DSGE-SVECM model can be supported by Thai data. A shock to monetary policy is effective with a lag. Government spending policy is also effective with a lag and some crowding-out effects on output. An adverse shock in tax policy unexpectedly stimulates the economy, indicating room for enhancing economic growth by relaxing revenue constraint. Monetary policy is mainly implemented to correct a consequence of a fiscal shock on inflation (and also the domestic and foreign shocks), while fiscal policy appears to counter a consequence of the monetary policy shock on output.
Essays In Monetary Policy And Learning
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Author : Gabriela Best
language : en
Publisher:
Release Date : 2010
Essays In Monetary Policy And Learning written by Gabriela Best and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with categories.
My dissertation is composed by three chapters that study monetary policy, international economics, and adaptive learning. The first and third chapters estimate New Keynesian DSGE models in order to examine the fear of floating phenomenon pervasive in emerging markets and the causes of the Great Inflation in the U.S. The first chapter estimates a small open economy model for the period after the 1994 crisis in Mexico. I find that the estimation of a Taylor rule for setting nominal interest rates favors a consistent response to the short-run nominal exchange rate post 1994. These results provide evidence that Mexico suffers from fear of floating. The second and the third chapters of my dissertation contribute to the studies of the implications of adaptive learning in monetary policy. The second chapter evaluates the desirability of policy rules that respond to wage inflation in a model with staggered price and wage setting in the context of determinacy and stability under adaptive learning. I find that, when the central bank responds to wage and price inflation and to the output gap a Taylor principle for wage and price inflation arises, but it is not necessarily related to stability under learning dynamics The third chapter proposed two potential channels through which monetary policy played a role in the Great Inflation. One approach holds that monetary policymakers during the 1970s preferred stabilizing output while post 1979 they preferred inflation stabilization. An alternative explanation contends that the Federal Reserve held misperceptions about the structure of the economy. The Great Inflation analysis incorporates policymakers that are learning adaptively and in that fashion, they form erroneous beliefs about the structure of the economy. The empirical results conclude that both channels are necessary to illustrate the role played by monetary policy in propagating and ending the Great Inflation. My dissertation results support Sargent's (1999) view that adaptive learning is a relevant mechanism affecting inflation policy.
Inflation And The Role Of Stabilization Policies In A Small Open Economy
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Author : Gianna Claudia Giannelli
language : it
Publisher:
Release Date : 1982
Inflation And The Role Of Stabilization Policies In A Small Open Economy written by Gianna Claudia Giannelli and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1982 with categories.
Essays In Central Bank Policymaking
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Author : Abhijit Sen Gupta
language : en
Publisher:
Release Date : 2006
Essays In Central Bank Policymaking written by Abhijit Sen Gupta 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.
Output Inflation And Stabilization In A Small Open Economy
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Author : John Harold Rogers
language : en
Publisher:
Release Date : 1993
Output Inflation And Stabilization In A Small Open Economy written by John Harold Rogers and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1993 with Economic stabilization categories.
Three Essays On Inflation Dynamics And Oil Economics In The Context Of The New Keynesian Phillips Curve
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Author : Somayeh Mardaneh
language : en
Publisher:
Release Date : 2013
Three Essays On Inflation Dynamics And Oil Economics In The Context Of The New Keynesian Phillips Curve written by Somayeh Mardaneh and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with categories.
Essays On Business Cycles And Endogenous Growth
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Author : Dmitry Brizhatyuk
language : en
Publisher:
Release Date : 2020
Essays On Business Cycles And Endogenous Growth written by Dmitry Brizhatyuk and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with categories.
This dissertation explores the nexus between asset and credit market cycles, short-run fluctuations, and growth. What factors contribute to slow and incomplete recoveries from major crises? Why are some economies more prone to such dynamics than others and what lessons does it offer for policymakers? These are among the questions that I explore in my research. In the first chapter, I document that persistent fluctuations in trend growth -- medium frequency cycles -- tend to be more volatile and negatively skewed in emerging as opposed to developed small open economies. I argue that this evidence can be understood as stemming from the non-linear interaction between credit cycles, occasionally binding collateral constraints, and innovation-driven endogenous growth. Negative shocks are highly detrimental to productivity growth in vulnerable economies that are prone to sudden stops, but this is not the case in economies with deep financial markets where agents are more often able to optimally borrow to offset temporary negative income shocks. The second chapter studies the long-term effects of housing market boom-and-bust cycles. I first examine the relationship between the dynamics of the housing market, household debt, and economic activity in a historical panel of 50 countries. I show that housing market crashes robustly predict slower future output growth, most of which is explained by slower total factor productivity growth. Notably, the magnitude of this relation is increasing in the measure of preexisting household debt. To interpret these stylized facts, I construct a two-agent (borrower-saver) dynamic general equilibrium model with an occasionally binding collateral constraint tied to housing equity. Productivity grows endogenously in the model through forward-looking innovation investment. When the preexisting level of debt is sufficiently high, negative housing demand shocks cause the collateral constraint to bind and trigger deleveraging. The endogenous slowdown in TFP growth emerges as one of the adjustment margins during this process, prolonging the real effects of a crisis. The initial shock is amplified by a negative feedback loop between deleveraging, borrowers' housing wealth, and growth. I use the calibrated model to identify implications for the policy response during episodes of household deleveraging. Measures that reduce the debt burden of borrowers are effective in alleviating the short-run and persistent effects of deleveraging. In terms of monetary policy, the endogenous response of productivity growth warrants a greater focus on short-run output stabilization as opposed to inflation stabilization. Finally, in the third chapter (joint with Fabio Ghironi) we study the macroeconomic consequences of trade policy uncertainty emphasizing its negative effects on productivity growth. To that end, we build a small open economy model with nominal rigidity, innovation-driven endogenous growth, and time-varying volatility of domestic import tariffs. Several conclusions emerge: import tariff uncertainty shocks act as aggregate supply shocks; they cause a temporary improvement of the current account along with the real exchange rate appreciation in the medium run. In addition, an increase in import tariff uncertainty causes a sharp decline in the introduction of new intermediate products, which is detrimental to productivity growth and prolongs the effect of the shock. The size of these persistent effects -- relative to short-term effects -- is much larger for tariff uncertainty shock than for tariff level shocks. We show that endogenous risk premia in equity and bond markets is the key channel transmitting the shock to the broader economy and study role monetary policy in shaping it.
The Great Inflation
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Author : Michael D. Bordo
language : en
Publisher: University of Chicago Press
Release Date : 2013-06-28
The Great Inflation written by Michael D. Bordo and has been published by University of Chicago Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-06-28 with Business & Economics categories.
Controlling inflation is among the most important objectives of economic policy. By maintaining price stability, policy makers are able to reduce uncertainty, improve price-monitoring mechanisms, and facilitate more efficient planning and allocation of resources, thereby raising productivity. This volume focuses on understanding the causes of the Great Inflation of the 1970s and ’80s, which saw rising inflation in many nations, and which propelled interest rates across the developing world into the double digits. In the decades since, the immediate cause of the period’s rise in inflation has been the subject of considerable debate. Among the areas of contention are the role of monetary policy in driving inflation and the implications this had both for policy design and for evaluating the performance of those who set the policy. Here, contributors map monetary policy from the 1960s to the present, shedding light on the ways in which the lessons of the Great Inflation were absorbed and applied to today’s global and increasingly complex economic environment.