Mortgage Pricing and Monetary Policy

Asset Pricing and Monetary Policy∗

This paper examines the role of money in understanding the behavior of asset prices and whether and how monetary policy should react to asset prices such as stock prices and equity premiums. To do so, I introduce money via the form of transaction cost into a production economy with limited stock market participation where agents with lower inter-temporal elasticity of substitution (IES), called...

State-Dependent Pricing and Optimal Monetary Policy

Abstract: This paper analyzes optimal monetary policy under precommitment in a state-dependent pricing (SDP) environment. Under SDP, monopolistically competitive firms are allowed to endogenously change the timing of price adjustments. I show that this endogenous timing of price adjustment alters the tradeoff and the cost of inflation variation faced by the monetary authority in comparison to t...

Asymmetric (S,s) pricing: implications for monetary policy

Monetary Aggregates and Monetary Policy

This is a special conference for the Federal Reserve Bank of Boston, and for me personally. The role of monetary aggregates in monetary policy was intensely controversial when I joined the staff of the Board of Governors in May 1969. I was immediately asked to join the staff of the newly formed FOMC Committee on the Directive. Governor Sherman Maisel chaired that committee; the other two member...

Central Bank Transparency and Monetary Policy Effectiveness

The paper concentrates on the conditions, contingencies and determinants of central bank transparency and communication. From the state of the economy and the quality of national institutions, to the structure of monetary policy committees, the personality of the governor and the nature of the monetary policy framework - with a particular focus on the case of inflation targeting, there i...