This note uses a nonlinear structural vector autoregression model to empirically investigate the effectiveness of official foreign exchange (FX) interventions in an economy when interest rates are constrained to the zero level, based on Japanese data in the 1990s. The model allows us to estimate the effects of FX interventions operating through different channels. We find that FX interventions ...

The observations in this talk come from a paper in preparation by A. Čap, M. Cowling, F. De Mari, M. Eastwood and R. McCallum about the Heisenberg group and the flag manifold, and more general papers by Cowling, De Mari, A. Korányi and H.M. Reimann, one published [?] and one in preparation, as well as papers by McCallum (in preparation) and B. Warhurst [?]. A Carnot group N is a connected, simp...

This paper tests whether or not gains to monetary policy coordination exist in the New Keynesian two country model proposed in Clarida, Gali and Gertler (2002). Major innovations include rigorous numerical analysis that takes advantage of recent techniques proposed by Laffargue (1990) and Klein (2000) and an attention to robustness analysis as advocated by McCallum (1999) by comparing all resul...

We investigate both the rational explosive inflation paths studied by (McCallum 2001), and the classification of fiscal and monetary policies proposed by (Leeper 1991), for stability under learning of the rational expectations equilibria (REE). Our first result is that the fiscalist REE in the model of (McCallum 2001) is not locally stable under learning. In contrast, in the setting of (Leeper ...

The paper investigates the stabilizing potential of fiscal policy in a monetary union. The discussion about fiscal stabilization policy has been revived in the context of EMU. We consider a taxation-based stabilization policy, where the fiscal authority intends to minimize the output gap. As policy instrument, we consider a time-varying component in taxes on consumption. The model combines a mo...

s from the important role that expectations of future events, such as policy adjustments, play in the problem of time inconsistency. 8 Some analysts argue for rules that adjust another instrument of monetary policy, the monetary base, to keep nominal GDP on target (McCallum 1987, 1988). Interest rate-based rules offer the advantage that they involve little change from the Fed’s current policy-s...

Book Details: Title: English Language Teaching: Policy and Practice Across the European Union; Editor: Lee McCallum; Publisher:Springer; Number of pages: 357;Year publication: 2022; ISBN: 978-981-19-2151-3 (Hardback); Also available as eBook: ISBN 978-981-19-2152-0

Recent work on the design of monetary policy reflects a general consensus on the appropriate objectives of monetary policy. As articulated by Svensson, “....there is considerable agreement among academics and central bankers that the appropriate loss function both involves stabilizing inflation around an inflation target and stabilizing the real economy, represented by the output gap” (Lars E. ...