| 1. |
- Svensson, Lars E. O.
(författare)
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How to Weigh Unemployment Relative to Inflation in Monetary Policy?
- 2014
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Ingår i: JOURNAL OF MONEY CREDIT AND BANKING. - : Wiley. - 0022-2879 .- 1538-4616. ; 46, s. 183-188
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Tidskriftsartikel (refereegranskat)abstract
- The monetary policy mandate for the Federal Reserve and of the Riksbank are essentially the same and boil down to stabilizing inflation around the inflation target and employment or unemployment around a long-run sustainable rate. The relative weight on stabilizing unemployment or employment versus stabilizing inflation may be close to one. A positive unemployment-gap forecast normally calls for a positive inflation-gap forecast.
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| 2. |
- Svensson, Lars E. O.
(författare)
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The Possible Unemployment Cost of Average Inflation below a Credible Target
- 2015
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Ingår i: American Economic Journal. - : American Economic Association. - 1945-7707 .- 1945-7715. ; 7:1, s. 258-296
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Tidskriftsartikel (refereegranskat)abstract
- If inflation expectations become firmly anchored at the inflation target even when average inflation deviates from the target, the long-run Phillips curve becomes nonvertical. During 1997-2011, average inflation expectations in Sweden have been close to the inflation target of 2 percent, whereas average inflation has fallen short of the target by 0.6 percentage points. The estimates reported suggest that the slope of the long-run Phillips curve is about 0.75. Then the average unemployment rate has been about 0.8 percentage points higher than if average inflation had been on target. This is a large unemployment cost of undershooting the inflation target.
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| 3. |
- Bertola, Giuseppe, et al.
(författare)
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Stochastic Devaluation Risk and the Empirical Fit of Target Zone Models
- 1990
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- In the model of this paper, an exchange rate fluctuates between given boundaries for random lengths of time and jumps discretely when devaluation occur. We provide explicit solutions for the stochastic processes followed by the exchange rate and by the expected rate of depreciation when the likelihood and the size of devaluations vary stochastically over time. The model produces realistic patterns of covariation between exchange rates and interest rate differentials, and provides interesting interpretations of available empirical evidence. We also specify how to infer devaluation risk from target zone data.
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| 4. |
- Dahlquist, Magnus, et al.
(författare)
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Estimatinf the Term Structure of Interest Rates with Simple and Complex Functional Forms : Nelson & Siegel vs. Longstaff & Schwartz
- 1994
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- The paper compares estimation of spot (zero-coupon) interest rates and implicit forward interest rates from Swedish Treasury bill rates and Government coupon bond yields with two functional forms for the discount function, the simple form of Nelson & Siegel (NS) and the complex form of Longstaff & Schwartz (LS). NS is much easier to use and has much better convergence properties, whereas LS is more flexible. For the data used, estimates with NS and LS are close, with only marginally better fit for LS. The fit of NS seems satisfactory for monetary policy purposes.
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| 5. |
- Dooley, Michael, et al.
(författare)
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Policy Inconsistency and External Debt Service
- 1990
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- In this paper it is argued that the willingness of debtors to make external debt-service payments reflects, in part, their inability to credibly and permanently suspend debt service. The benefits of a credible debt-service suspension would include increased private investment. Buth this would, in turn, tend to create conditions in which it would then be optimal for the government to resume payments. Thus, debt reamins a threat even after the announcement of suspension of debt service. It follows that the expected benefits of such a suspension are limited and may be offset by penalties imposed by creditors.
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| 6. |
- Dumas, Bernard, et al.
(författare)
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How Long do Unilateral Target Zones Last?
- 1991
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- We examine the expected survival time of a unilateral exchange rate target zone, when constraints on monetary policy prevent the central bank from exclusively focusing on defending the target zone. Generally the width of the target zone has a negligible effect on the expected survival time, and the dominant determinants are reserve levels and the degree of real and monetary divergence between the country in question and the rest of the world. For seemingly realistic parameters, the expected survivial time is fairly long: a few decades rather than a few years.
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| 9. |
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| 10. |
- Faust, Jon, et al.
(författare)
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The Equilibrium Degree of Transparency and Control in Monetary Policy
- 1999
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- We examine a central bank's endogenous choice of degree of control and degree of transparency, under both commitment and discretion. Under commitment, we find that the deliberate choice of sloppy control is far less likely under a standard central-bank loss function than reported for a less standard loss function by Cukierman and Meltzer. Under discretoin, maximum degree of control is the only equilibrium. With regard to the degree of transparency, under commitment, a sufficiently patient bank with sufficiently low average and maximum transparency are equilibria. We argue that discretion is the more realistic transparency. A maximum feasible degree of control with a minimum degree of transparency is then a likely outcome. The Bundesbank and the Federal Reserve System are, arguably, examples of this outcome.
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