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In a recent research, four European Central Bank economists found that negative interest rate policy in the eurozone can encourage banks to increase lending and encourage cooperations to increase investments.That is, contrary to what macroeconomics models usually predict, interest rate policy can still has stimulative effect even the zero lower bound is reached.
A story about three economists agree with the prevailing consensus that the Phillips Curve of the US is flattened in the last few decades on the one hand; and dispute the idea that the Phillips Curve is dead on the other.
In a recent NBER working paper "Monetary Policy Communications and their Effects on Household Inflation Expectations", economists Olivier Coibion, Yuriy Gorodnichenko and Michael Weber tried to find out how the household's expectation for inflation change with regard to the information they received.
In their working paper "A Skeptical View of the Impact of the Fed's Balance Sheet," economists David Greenlaw, James D. Hamilton, Ethan Harris, and Kenneth D. West challenge some earlier studies that concluded QEs have a significant economic impact. Their major argument is that those research used simple event studies to quantify the impact of QE.
In a recent policy research, Joseph Gagnon of Peterson Institute for International Economics and Brian Sack of D.E. Shaw Group asked an important question: when the Federal Reserve implement QE in the next crisis, should they use it somewhat differently?
Former Fed Governor Jeremy Stein explain to us his recent research “The Federal Reserve's Balance Sheet as a Financial-Stability Tool” coauthored with Robin Greenwood and Samuel Hanson.
Welcome to the latest installment of our interview series “Where is the General Theory of the 21st Century?”“Where is the General Theory of the...
The above figure shows the balance sheet of four major central banks from 2005 to 2015. Above the horizontal axis is the asset side...
The Fiscal Theory of the Price Level says that money has value because the government accepts it for taxes, and inflation is fundamentally a fiscal phenomenon