Browsing by Subject "Monetary policy (Targets, instruments, and effects)"

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Adaptive Expectations, Underparameterization and the Lucas Critique

Evans, George W., 1949-; Ramey, Garey (University of Oregon, Dept. of Economics, 2001-11-29)

A striking implication of the replacement of adaptive expectations by Rational Expectations was the "Lucas Critique," which showed that expectation parameters, and endogenous variable dynamics, depend on policy parameters. ...
Expectations and the Stability Problem for Optimal Monetary Policies

Evans, George W., 1949-; Honkapohja, Seppo, 1951- (University of Oregon, Dept. of Economics, 2001-08-03)

A fundamentals based monetary policy rule, which would be the optimal monetary policy without commitment when private agents have perfectly rational expectations, is unstable if in fact these agents follow standard adaptive ...
Friedman's Money Supply Rule versus Optimal Interest Rate Policy

Evans, George W., 1949-; Honkapohja, Seppo, 1951- (University of Oregon, Dept of Economics, 2003-07-12)

Using New Keynesian models, we compare Friedman's k-percent money supply rule to optimal interest rate setting, with respect to determinacy, stability under learning and optimality. First we review the recent literature: ...
Monetary policy, expectations and commitment

Evans, George W., 1949-; Honkapohja, Seppo, 1951- (University of Oregon, Dept. of Economics, 2002-05-22)

Commitment in monetary policy leads to equilibria that are superior to those from optimal discretionary policies. A number of interest rate reaction functions and instrument rules have been proposed to implement or approxmiate ...
Monetary policy, indeterminacy and learning

Evans, George W., 1949-; McGough, Bruce (University of Oregon, Dept. of Economics, 2003-10-11)

The development of tractable forward looking models of monetary policy has lead to an explosion of research on the implications of adopting Taylor-type interest rate rules. Indeterminacies have been found to arise for some ...
Policy Interaction, Expectations and the Liquidity Trap

Evans, George W., 1949-; Honkapohja, Seppo, 1951- (University of Oregon, Dept. of Economics, 2003-04-30)

We consider inflation and government debt dynamics when monetary policy employs a global interest rate rule and private agents forecast using adaptive learning. Because of the zero lower bound on interest rates, active ...