16.05.2022: Cristina Manea – Big techs and the credit channel of monetary policy

Presenter: Cristina Manea Affiliation: Deutsche Bundesbank, Research Centre Paper: Big Techs and the Credit Channel of Monetary Policy Date: May 16, 2022 Time: 13:00 GMT Abstract: We study how the entry of large technology firms such as Amazon, Alibaba or Facebook (“Big Techs”) into finance may affect the transmission of monetary policy. Our empirical analysis … Read more

15.03.2022: Jordi Galí – Monetary policy and endogenous financial crises

Presenter: Jordi Galí Affiliation: Universitat Pompeu Fabra, Department of Economics, CREI and Barcelona GSE. Paper: Monetary Policy and Endogenous Financial Crises Date: March 15, 2022 Time: 13:00 GMT Abstract: We study whether a central bank should deviate from its objective of price stability to promote financial stability. We tackle this question within a textbook New … Read more

22.02.2022: Lawrence H. Summers – The Fed’s strategy review: relevance for small open economies

Presenter: Lawrence H. Summers Affiliation: Harvard University Talk title: The Fed’s Strategy Review: Relevance for Small Open Economies. Date: February 22, 2022 Time: 13:30 GMT Click here to attend this seminar

28.12.2021: Cynthia Wu – Average inflation targeting: time inconsistency and intentional ambiguity

Presenter: Cynthia Wu Affiliation: University of Notre Dame, Department of Economics Paper: Average Inflation Targeting: Time Inconsistency and Intentional Ambiguity Date: December 28, 2021. Time: 13:00 GMT We study the implications of the Fed’s new policy framework of average inflation targeting (AIT) and its ambiguous communication. The central bank has the incentive to deviate from … Read more

14.12.2021: Jean Tirole – Industrial monetary policy

Presenter: Jean Tirole Affiliation: Toulouse School of Economics Paper: Industrial Monetary Policy Date: December 14, 2021 Time: 13:00 GMT Abstract: We consider “industrial monetary policies”: Liquidity support policies through which authorities shape the location and continuation of economic activity on their soil, with consequences for banks’ international specialization, place of incorporation, charter of affiliates and … Read more

02.11.2021: Lucrezia Reichlin – Monetary-fiscal crosswinds in the European Monetary Union

We study the monetary-fiscal mix in the European Monetary Union. The medium and long-run effects of conventional and unconventional monetary policy can be analysed by combining monetary policy shocks identified in a Structural VAR, and the general government budget constraint featuring a single central bank and multiple fiscal authorities. In response to a conventional easing of the policy rate, the real discount rate declines, absorbing the increase in deficit due to the fiscal policy leaning towards the easing. Conversely, in response to an unconventional easing of the long end of the yield curve, the discount rate declines strongly, while the primary fiscal surplus barely moves. The long-run effect of unconventional monetary easing on inflation is about half than that of conventional, a result which also explains the muted response of fiscal policy. Results do not point to large differences across countries.

05.10.2021: Saki Bigio – A model of credit, money, interest, and prices

Presenter: Saki Bigio Affiliation: University of California, Los Angeles, Department of Economics. Paper: A Model of Credit, Money, Interest, and Prices Date: October 05, 2021 Time: 15:00 IDT (GMT+3) Abstract: This paper integrates a realistic implementation of monetary policy through the banking system into an incomplete-market economy with wage rigidity. Monetary policy sets policy rates … Read more

07.07.2021: Ludwig Straub – Exchange rates and monetary policy with heterogeneous agents: sizing up the real income channel

Introducing heterogeneous households to a New-Keynesian small open economy model amplifies the real income channel of exchange rates: the rise in import prices from a depreciation lowers households’ real incomes, and leads them to cut back on spending. This channel counteracts the standard expenditure-switching channel of exchange rates, and can result in a contractionary effect of a depreciation on domestic output. We study the monetary policy implications of a large and dominant real income channel.

28.06.2021: Jennifer La’O – Optimal monetary policy and communication with an informationally-constrained central banker

We study optimal monetary policy and central bank communication when firms make nominal pricing decisions under uncertainty and when the monetary authority likewise has incomplete information about the current economic state. We find that the optimal monetary policy implements flexible-price allocations despite this multitude of measurability constraints; we explore a series of different implementations. Away from such policies, we find that public communication by the central bank is welfare-improving as long as either firm information or central bank information is sufficiently precise.

19.05.2021: Elisa Rubbo – Networks, Phillips curves, and monetary policy

I develop an analytical framework for monetary policy in a multi-sector economy with a general input-output network. I derive the Phillips curve and welfare as a function of the underlying production primitives. Building on these results, I characterize (i) the correct definition of aggregate inflation and (ii) how the optimal policy trades off inflation in different sectors, based on the production structure. I construct two novel inflation indicators. The first yields a well-specified Phillips curve. Consistent with the theory, this index provides a better fit in Phillips curve regressions than conventional specifications with consumer prices. The second is an optimal policy target, which captures the tradeoff between stabilizing aggregate output and relative output across sectors. Calibrating the model to the U.S. economy I find that targeting consumer inflation generates a welfare loss of 0.8% of per-period GDP relative to the optimal policy, while targeting the output gap is close to optimal.

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