Presenter: Fontanier Affiliation: Yale University, Yale School of Management Paper: Optimal Policy for Behavioral Financial Crises Date: October 25, 2022 Time: 12:00 GMT (15:00 Israel Time) Abstract: Should policymakers adapt their macroprudential and monetary policies when the financial sector is vulnerable to belief-driven boom-bust cycles? I develop a model in which financial intermediaries are subject … Read more
Presenter: Alp Simsek Affiliation: Yale University, Yale School of Management Paper: A Note on Temporary Supply Shocks with Aggregate Demand Inertia Date: May 10, 2022 Time: 13:00 GMT Abstract: We study optimal monetary policy during temporary supply contractions when aggregate demand has inertia and expansionary policy is constrained. In this environment, it is optimal to … Read more
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.