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Sovereign Risk, Fiscal Policy, and Macroeconomic Stability

Sovereign Risk, Fiscal Policy, and Macroeconomic Stability »

Source: Sovereign Risk, Fiscal Policy, and Macroeconomic Stability

Volume/Issue: 2012/33

Series: IMF Working Papers

Author(s): Keith Kuester , Gernot Mueller , Giancarlo Corsetti , and Andre Meier

Publisher: INTERNATIONAL MONETARY FUND

Publication Date: 01 January 2012

ISBN: 9781463933180

Keywords: zero lower bound, government spending, spending cuts, central bank, inflation,

This paper analyzes the impact of strained government finances on macroeconomic stability and the transmission of fiscal policy. Using a variant of the model by Curdia and Woodford (2009), we study a "sovereign ris...

Aging, Secular Stagnation and the Business Cycle

Aging, Secular Stagnation and the Business Cycle »

Source: Aging, Secular Stagnation and the Business Cycle

Volume/Issue: 2018/67

Series: IMF Working Papers

Author(s): Callum Jones

Publisher: INTERNATIONAL MONETARY FUND

Publication Date: 23 March 2018

ISBN: 9781484345405

Keywords: Great Recession, Demographics, Zero Lower Bound, Forward Guidance, General, Demographic Trends and Forecasts

As of 2015, U.S. log output per capita was 12 percent below what its pre-2008 linear trend would predict. To understand why, I develop and estimate a model of the US with demographics, real and monetary shocks, and...

Household Leverage and the Recession

Household Leverage and the Recession »

Source: Household Leverage and the Recession

Volume/Issue: 2018/194

Series: IMF Working Papers

Author(s): Callum Jones , Virgiliu Midrigan , and Thomas Philippon

Publisher: INTERNATIONAL MONETARY FUND

Publication Date: 30 August 2018

ISBN: 9781484373866

Keywords: United States, Western Hemisphere, Financial crises, Great Recession, Household Debt, Regional Evidence, Zero Lower Bound, General

We evaluate and partially challenge the ‘household leverage' view of the Great Recession. In the data, employment and consumption declined more in states where household debt declined more. We study a model where l...

Credible Commitment to Optimal Escape from a Liquidity Trap

Credible Commitment to Optimal Escape from a Liquidity Trap »

Source: Credible Commitment to Optimal Escape from a Liquidity Trap : The Role of the Balance Sheet of an Independent Central Bank

Volume/Issue: 2004/162

Series: IMF Working Papers

Author(s): Olivier Jeanne , and Lars Svensson

Publisher: INTERNATIONAL MONETARY FUND

Publication Date: 01 September 2004

ISBN: 9781451857900

Keywords: Zero lower bound for interest rates, central bank, inflation, money supply, price level, Open Economy Macroeconomics,

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 escap...

Monetary Policy with Negative Interest Rates: Decoupling Cash from Electronic Money1

Monetary Policy with Negative Interest Rates: Decoupling Cash from Electronic Money1 »

Source: Monetary Policy with Negative Interest Rates: Decoupling Cash from Electronic Money

Volume/Issue: 2018/191

Series: IMF Working Papers

Author(s): Katrin Assenmacher , and Signe Krogstrup

Publisher: INTERNATIONAL MONETARY FUND

Publication Date: 27 August 2018

ISBN: 9781484370025

Keywords: Central banks and their policies, Zero lower bound; Monetary policy framework, Dual local currency regime, Legal tender, Zero lower bound, Monetary policy framework, Monetary Policy (Targets, Instruments, and Effects)

Monetary policy space remains constrained by the lower bound in many countries, limiting the policy options available to address future deflationary shocks. The existence of cash prevents central banks from cutting...

International Spillovers of Forward Guidance Shocks*

International Spillovers of Forward Guidance Shocks* »

Source: International Spillovers of Forward Guidance Shocks

Volume/Issue: 2018/114

Series: IMF Working Papers

Author(s): Callum Jones , Mariano Kulish , and Daniel Rees

Publisher: INTERNATIONAL MONETARY FUND

Publication Date: 15 May 2018

ISBN: 9781484353554

Keywords: Spillovers, Forward Guidance, Unconventional Monetary Policy, Zero Lower Bound, Monetary Policy (Targets, Instruments, and Effects), Open Economy Macroeconomics

After 2007, countries that cut their policy interest rates close to zero turned, among other policies, to forward guidance. We estimate a two-country model of the U.S. and Canada to quantify how unexpected changes...

Sovereign Risk, Fiscal Policy, and Macroeconomic Stability

Sovereign Risk, Fiscal Policy, and Macroeconomic Stability »

Volume/Issue: 2012/33

Series: IMF Working Papers

Author(s): Keith Kuester , Gernot Mueller , Giancarlo Corsetti , and Andre Meier

Publisher: INTERNATIONAL MONETARY FUND

Publication Date: 01 January 2012

DOI: http://dx.doi.org/10.5089/9781463933180.001

ISBN: 9781463933180

Keywords: zero lower bound, government spending, spending cuts, central bank, inflation,

This paper analyzes the impact of strained government finances on macroeconomic stability and the transmission of fiscal policy. Using a variant of the model by Curdia and Woodford (2009), we study a "sovereign ris...

Frontiers of Monetary Policymaking

Frontiers of Monetary Policymaking »

Source: Frontiers of Monetary Policymaking : Adding the Exchange Rate as a Tool to Combat Deflationary Risks in the Czech Republic

Volume/Issue: 2015/74

Series: IMF Working Papers

Author(s): Ali Alichi , Jaromir Benes , Joshua Felman , Irene Feng , Charles Freedman , Douglas Laxton , Evan Tanner , David Vavra , and Hou Wang

Publisher: INTERNATIONAL MONETARY FUND

Publication Date: 01 April 2015

ISBN: 9781475532371

Keywords: Inflation-Forecast Targeting, exchange rate tool, zero lower bound, forward guidance, central bank communications, inflation, exchange, exchange rate, interest, Monetary Policy (Targets

The paper first describes how the Czech National Bank (CNB) moved gradually from a fixed exchange rate regime to the frontiers of Inflation-Forecast Targeting. It then focuses on the CNB's recent experience in addi...

Liquidity Trap and Excessive Leverage

Liquidity Trap and Excessive Leverage »

Source: Liquidity Trap and Excessive Leverage

Volume/Issue: 2014/129

Series: IMF Working Papers

Author(s): Anton Korinek , and Alp Simsek

Publisher: INTERNATIONAL MONETARY FUND

Publication Date: 21 July 2014

ISBN: 9781498370943

Keywords: Leverage, liquidity trap, zero lower bound, aggregate demand externality, efficiency, aggregate demand, inflation, real interest rate, contractionary monetary policy, Financial Markets and the Macroeconomy

We investigate the role of macroprudential policies in mitigating liquidity traps driven by deleveraging, using a simple Keynesian model. When constrained agents engage in deleveraging, the interest rate needs to f...

Unconventional Monetary Policy in a Small Open Economy1

Unconventional Monetary Policy in a Small Open Economy1 »

Source: Unconventional Monetary Policy in a Small Open Economy

Volume/Issue: 2017/268

Series: IMF Working Papers

Author(s): Margaux MacDonald , and Micha? Ksawery Popiel

Publisher: INTERNATIONAL MONETARY FUND

Publication Date: 01 December 2017

ISBN: 9781484330944

Keywords: Central banks and their policies, Small open economy; unconventional monetary policy; Bayesian structural VAR; zero lower bound; international monetary policy transmission, Small open economy, unconventional monetary policy, Bayesian structural VAR, zero lower bound, international monetary policy transmission, Monetary Policy (Targets, Instruments, and Effects)

This paper investigates the effects of unconventional monetary policy in a small open economy. Using recently proposed shadow interest rates to capture unconventional monetary policy at the zero lower bound (ZLB) w...