摘要 :
In response to the ongoing discussion in the literature of the appropriate framework for monetary policy, we compare two of the most frequently discussed alternatives to inflation targeting-targeting either the level of nominal GD...
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In response to the ongoing discussion in the literature of the appropriate framework for monetary policy, we compare two of the most frequently discussed alternatives to inflation targeting-targeting either the level of nominal GDP or the price level-within the context of a simple vector autoregressive (VAR) model. Our approach can be considered a constrained-discretion approach. The model is estimated using quarterly data over the period 1979:4-2003:4, a period in which the economy was buffeted by substantial supply and demand shocks. The paths of the federal funds rate, nominal GDP, real GDP, and the price level under nominal GDP and price level targeting are simulated over the 2004:1-2006:4 period. We evaluate nominal GDP and price level targeting by computing the values of simple loss functions. The loss function values indicate that closely targeting the path of nominal GDP based on 4.5% desired growth in nominal GDP produces noticeably lower losses in the simulation period than either price level targeting or a continuation of the implicit flexible inflation targeting monetary policy that characterized the estimation period.
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摘要 :
We demonstrate three facts consistent with the debt deflation/credit view explanation of the Great Depression. First, private medium- and long-term nominal debt during the 1920s exhibited a combination of a high initial value rela...
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We demonstrate three facts consistent with the debt deflation/credit view explanation of the Great Depression. First, private medium- and long-term nominal debt during the 1920s exhibited a combination of a high initial value relative to income and a rapid growth rate that is unparalleled in a consistent data set covering more than half a century. Second, the debt issued during the 1920s occurred in a stable price regime. Third, near the onset of the Depression, the price process switched to one of deflation. Taken together, the evidence suggests that debt deflation was operative during the Depression.
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摘要 :
Although probably reluctant to admit it, many empirical macroeconomists have had the uneasy experience of estimating models, publishing results of these models, and then upon later re-estimation with updated data, finding that the...
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Although probably reluctant to admit it, many empirical macroeconomists have had the uneasy experience of estimating models, publishing results of these models, and then upon later re-estimation with updated data, finding that the initial results nolonger hold. In many instances, such problems could have been avoided if the researcher had investigated the robustness of the initial results with different data vintages. Until now, the implicit cost-benefit analysis done by most researchers has suggested that cost of constructing even a few such vintages is overwhelming. In an ambitious and important research agenda, Tom Stark and Dean Croushore have constructed, and begun to evaluate, a real-time dataset. This dataset contains vintages from November 1965 to the present, with each vintage beginning in 1947:1. Each vintage includes key quarterly data from the National Income and Product Accounts and monthly data on important monetary and reserves aggregates as well as the unemployment rate, the CPI.and two interest rates. Each vintage is constructed in the middle of the quarter, and includes only data known at that time.
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