Optimal Monetary Stabilization Policy

An Exploration of Optimal Stabilization Policy - Faculty & Research

This paper examines the optimal response of monetary and fiscal policy to a decline in aggregate demand.

Stabilization vs. Redistribution: The Optimal Monetary-Fiscal Mix

Stabilization and redistribution are intertwined in a model with heterogeneity, imperfect insurance, and nominal rigidity-making fiscal and monetary policy ...

Optimal Target Criteria for Stabilization Policy - ResearchGate

... The monetary policy decision problem then concerns the choice among those joint distributions, where the dis- tributions are conditional on monetary policy.

A Dynamic Optimization Model of Monetary Stabilization Policy

Corresponding author ... By solving a dynamic optimization structure, this paper aims to achieve an optimal monetary policy which enables the central bank to ...

Optimal Monetary Policy in Open Economies - San Francisco Fed

Conversely, the optimal target will result in the complete stabilization of the domestic GDP deflator and output gap, vis-à-vis effi cient shocks — such as.

Globally Optimal Monetary Policy - University of Colorado Boulder

10 With sufficient starting inefficiencies in price dispersion and steady state, I confirm the result that stabilization policy is no longer ...

Optimal Stabilization Policy with Flexible Prices - CiteSeerX

We construct a dynamic stochastic general equilibrium model to study optimal monetary stabilization policy. Unlike existing New Keynesian.

Optimal Monetary Policy in Production Networks

stabilization implements zero relative price dispersion across firms, and hence achieves productive efficiency, regardless of the extent of nominal rigidities ( ...

Optimal Monetary Policy with Heterogeneous Agents - Eduardo Dávila

We compute optimal stabilization policy in response to productivity, demand, and cost-push shocks using sequence-space methods, which we extend to Ramsey ...

Optimal Monetary Policy with Heterogeneous Agents: A Timeless ...

We compute optimal stabilization policy in response to productivity, demand, and cost-push shocks both non-linearly and using sequence-space ...

the optimum monetary aggregate for stabilization policy

This paper presents a procedure for determining the optimal monetary aggregate for stabilization policy. To illustrate the procedure, a simple stochastic ...

DP15199 Stabilization vs. Redistribution: the Optimal Monetary ...

... policy can be used in conjunction to monetary policy to strike the optimal balance between stabilization and insurance (redistribution) motives.

Optimal Monetary and Fiscal Policies in Disaggregated Economies

Because monetary policy is a blunt instrument and government spending trades off stabilization against the optimal-level public good provision, the first best ...

Optimal monetary policy in an economy with inflation persistence

output stabilization not only means that inflation is higher in the period of the shock but also that the inflation is much more persistent (see Figs. 5 and 6).

Optimal Monetary Policy with Heterogeneous Agents: Discretion ...

We characterize an analytical targeting rule for optimal stabilization policy in response to demand, supply, and cost-push shocks, and use it to illustrate the ...

Optimal monetary policy in the generalized Taylor economy

We find that in the GTE framework it is impossible for the central bank to simultaneously stabilize all the objectives and therefore the first-best allocation ...

Optimal Monetary Policy and Liquidity with Heterogeneous ...

Price stability has significant welfare costs because inflation volatility hinders the consumption volatility of constrained households as a side-effect of ...

Using Monetary Policy to Stabilize Economic Activity

While central banks may lack the ability to steer future expecta- tions in the ways called for under optimal policy, they might still be able to influence ...

An Exploration of Optimal Stabilization Policy Working Paper

What is the optimal response of monetary and fiscal policy to an economy-wide decline in aggregate demand? This question has been at the ...

Principles of Optimal Stabilization Policy - Banco de Portugal

It is also standard to abstract from the money demand distortion by assuming that the economy is the cashless limit of a sequence of monetary economies. By ...