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[BOOK] Interest and prices: Foundations of a theory of monetary policy

[PDF] from cenet.org.cn
M Woodford - 2003 - books.google.com
With the collapse of the Bretton Woods system, any pretense of a connection of the world's
currencies to any real commodity has been abandoned. Yet since the 1980s, most central
banks have abandoned money-growth targets as practical guidelines for monetary policy ...
Cited by 5018 - Related articles - All 16 versions

An optimization-based econometric framework for the evaluation of monetary policy: expanded version

[PDF] from hbs.edu
JJ Rotemberg… - 1998 - nber.org
This paper considers a simple quantitative model of output, interest rate and inflation
determination in the United States, and uses it to evaluate alternative rules by which the Fed
may set interest rates. The model is derived from optimizing behavior under rational ...
Cited by 1924 - Related articles - BL Direct - All 12 versions

Optimal monetary policy inertia

[PDF] from psu.edu
M Woodford - 1999 - nber.org
This paper considers the desirability of the observed tendency of central banks to adjust
interest rates only gradually in response to changes in economic conditions. It shows, in the
context of a simple model of optimizing private-sector behavior, that such inertial policy ...
Cited by 978 - Related articles - BL Direct - All 30 versions

[PDF] Interest rate rules in an estimated sticky price model

[PDF] from nber.org
JJ Rotemberg… - 1999 - nber.org
This paper seeks to evaluate monetary policy rules that generalize the rule proposed by
Taylor (1993). In particular, we consider rules in which the Fed sets the federal funds rate as
a function of the history of inflation, output, and the federal funds rate itself. Even though ...
Cited by 763 - Related articles - View as HTML - BL Direct - All 11 versions

The zero bound on interest rates and optimal monetary policy

[PDF] from hi.is
GB Eggertsson… - Brookings Papers on Economic Activity, 2003 - JSTOR
THE CONSEQUENCES FOR THE PROPER conduct of monetary policy of the existence of a
lower bound of zero for overnight nominal interest rates has recently become a topic of lively
interest. In Japan the call rate (the overnight cash rate analogous to the federal funds rate ...
Cited by 582 - Related articles - BL Direct - All 41 versions

Oligopolistic pricing and the effects of aggregate demand on economic activity

[PDF] from northwestern.edu
JJ Rotemberg… - 1989 - nber.org
ABSTRACT We construct a dynamic general equilibrium model in which the typical industry
colludes by threatening to punish deviations from an implicitly agreed upon pricing path. We
argue that models of this type explain better than do competitive models the way in which ...
Cited by 577 - Related articles - BL Direct - All 19 versions

Inflation forecasts and monetary policy

[PDF] from google.com
BS Bernanke… - 1997 - nber.org
Proposals for'inflation targeting'as a strategy for monetary policy leave open the important
operational question of how to determine whether current policies are consistent with the
long-run inflation target. An interesting possibility is that the central bank might target ...
Cited by 562 - Related articles - BL Direct - All 11 versions

Control of the public debt: A requirement for price stability?

[PDF] from northwestern.edu
M Woodford - 1996 - nber.org
The paper considers the role of limits upon the permissible growth of public debt, like those
stipulated in the Maastricht treaty, in making price stability possible. It is shown that a certain
type of fiscal instability, namely variations in the present value of current and future ...
Cited by 563 - Related articles - BL Direct - All 9 versions

Price-level determinacy without control of a monetary aggregate

M Woodford - Carnegie-Rochester Conference Series on Public …, 1995 - Elsevier
It is shown that the price level remains determinate even in the case of two kinds of radical
money supply endogeneity-an interest rate peg by the central bank, and a “free banking”
regime-that are commonly supposed to imply loss of control of the price level. Price level ...
Cited by 478 - Related articles - BL Direct - All 9 versions

The Taylor rule and optimal monetary policy

[PDF] from columbia.edu
M Woodford - The American Economic Review, 2001 - JSTOR
+ O. 5 (yt-t) where it denotes the Fed's operating target for the federal funds rate, Trt is the
inflation rate (measured by the GDP deflator), Yt is the log of real GDP, and jt is the log of
potential output (identified empirically with a linear trend). The rule has since been subject ...
Cited by 478 - Related articles - BL Direct - All 20 versions

Monetary policy and price level determinacy in a cash-in-advance economy

M Woodford - Economic theory, 1994 - Springer
Summary The paper considers the determinacy of the equilibrium price level in the cash-in-
advance monetary economy of Lucas and Stokey (1983, 1987), in the case of deterministic
“fundamentals”. The possibilities both of a multiplicity of perfect foresight equilibria and of “ ...
Cited by 470 - Related articles - All 5 versions

[PDF] Implementing optimal policy through inflation-forecast targeting

[PDF] from nber.org
LEO Svensson… - 2004 - nber.org
In recent years, many central banks have adopted inflation-targeting frameworks for the
conduct of monetary policy. These have proven in a number of countries to be effective
means of first lowering inflation and then maintaining both low and stable inflation and ...
Cited by 430 - Related articles - View as HTML - BL Direct - All 22 versions

The cyclical behavior of prices and costs

[PDF] from stanford.edu
JJ Rotemberg… - Handbook of macroeconomics, 1999 - Elsevier
Abstract Because inputs are scarce, marginal cost is an increasing function of output.
Diminishing returns, costs of increasing employment as well as the increasing marginal
disutility of working when hours worked and effort rise all contribute to make this function ...
Cited by 433 - Related articles - BL Direct - All 13 versions

Fiscal requirements for price stability

[PDF] from columbia.edu
M Woodford - 2001 - nber.org
This paper argues that maintaining price stability requires not only commitment to an
appropriate monetary policy rule, but an appropriate fiscal policy rule as well.'Ricardian
equivalence'does not imply that fiscal policy is irrelevant, except in the case of a certain ...
Cited by 421 - Related articles - BL Direct - All 20 versions

Dynamic general equilibrium models with imperfectly competitive product markets

[PDF] from 18.7.29.232
JJ Rotemberg… - 1993 - nber.org
This paper discusses the consequences of introducing imperfectly competitive product
markets into an otherwise standard neoclassical growth model. We pay particular attention
to the consequences of imperfect competition for the explanation of fluctuations in ...
Cited by 414 - Related articles - BL Direct - All 12 versions

Imperfect common knowledge and the effects of monetary policy

[PDF] from psu.edu
M Woodford - 2001 - nber.org
This paper reconsiders the Phelps-Lucas hypothesis, according to which temporary real
effects of purely nominal disturbances result from imperfect information, but departs from the
assumptions of Lucas (1973) in two crucial respects. Due to monopolistically competitive ...
Cited by 400 - Related articles - BL Direct - All 14 versions

[PDF] Markups and the business cycle

[PDF] from nber.org
JJ Rotemberg… - 1991 - nber.org
Perfectly competitive models of the effects of aggregate demand variations on output and
employment have great difficulty generating patterns of comovement among aggregate
variables that resemble typical" business cycle" patterns (Barro and King, 1984). We wish ...
Cited by 384 - Related articles - View as HTML - All 7 versions

Imperfect competition and the effects of energy price increases on economic activity

[PDF] from hbs.edu
JJ Rotemberg… - 1996 - nber.org
We show that modifying the standard neoclassical growth model by assuming that
competition is imperfect makes it easier to explain the size of the declines in output and real
wages that follow increases in the price of oil. Plausibly parameterized models of this type ...
Cited by 382 - Related articles - BL Direct - All 13 versions

Inflation stabilization and welfare

[PDF] from library.ru
M Woodford - 2001 - nber.org
This paper derives loss functions for monetary policy that are grounded in the welfare of
private agents, for optimizing models with nominal price rigidities. Inflation stabilization
enhances welfare, insofar as variable inflation results in real distortions when prices are ...
Cited by 377 - Related articles - BL Direct - All 15 versions

Plant-level adjustment and aggregate investment dynamics

[PDF] from hu-berlin.de
RJ Caballero, EMRA Engel, JC Haltiwanger… - Brookings Papers on …, 1995 - JSTOR
THE EMPIRICAL INVESTMENT literature is full of disappointments. From time to time waves
of new ideas challenge the aggregate investment equation, but these challenges are rarely
successful, and progress is, at best, slow. There are serious theoretical obstacles, ...
Cited by 374 - Related articles - BL Direct - All 19 versions

Rational asset pricing bubbles

[PDF] from uc3m.es
MS Santos… - Econometrica: Journal of the Econometric …, 1997 - JSTOR
This paper provides a fairly systematic study of general economic conditions under which
rational asset pricing bubbles may arise in an intertemporal competitive equilibrium
framework. Our main results are concerned with nonexistence of asset pricing bubbles in ...
Cited by 330 - Related articles - BL Direct - All 17 versions

Learning to believe in sunspots

[PDF] from nyu.edu
M Woodford - Econometrica: Journal of the Econometric Society, 1990 - JSTOR
An adaptive learning rule is exhibited for the Azariadis (1981) overlapping generations
model of a monetary economy with multiple equilibria, under which the economy may
converge to a stationary sunspot equilibrium, even if agents do not initially believe that ...
Cited by 320 - Related articles - All 10 versions

Central bank communication and policy effectiveness

[PDF] from mecon.gov.ar
M Woodford - 2005 - nber.org
A notable change in central banking over the past 15 years has been a world-wide
movement toward increased communication by central banks about their policy decisions,
the targets that they seek to achieve through those decisions, and the central bank's view ...
Cited by 322 - Related articles - BL Direct - All 51 versions

[PDF] Interest and prices: foundations of a theory of monetary policy

[PDF] from catoinstitute.org
M Woodford - Manuscript in preparation for Princeton University, 2002 - catoinstitute.org
The title of Michael Woodford's book is not an accidental echoing of the 1898 work by the
great Swedish economist Knut Wicksell. In fact, the book begins with a quotation from
Wicksell's earlier work that contends that perfect price stability, in conjunction with free ...
Cited by 313 - Related articles - View as HTML - All 20 versions

Indicator variables for optimal policy

[PDF] from psu.edu
LEO Svensson… - Journal of monetary economics, 2003 - Elsevier
The optimal weights on indicators in models with partial information about the state of the
economy and forward-looking variables are derived and interpreted, both for equilibria
under discretion and under commitment. An example of optimal monetary policy with a ...
Cited by 288 - Related articles - BL Direct - All 33 versions

[PDF] Commentary: How should monetary policy be conducted in an era of price stability?

[PDF] from psu.edu
M Woodford - New challenges for monetary policy, 1999 - Citeseer
It is a pleasure to be asked to comment upon Lars Svensson's thoughtful and ambitious
paper, though it raises far too many issues for me to attempt to address them all in the limited
time available here. Lars offers a thorough review of the recent scholarly literature on the ...
Cited by 273 - Related articles - All 22 versions

[PDF] Optimal monetary and fiscal policy: A linear-quadratic approach

[PDF] from nber.org
P Benigno… - 2004 - nber.org
While substantial research literatures seek to characterize optimal monetary and fiscal
policy, respectively, the two branches of the literature have largely developed in isolation,
and on apparently contradictory foundations. The modern literature on dynamically ...
Cited by 266 - Related articles - View as HTML - BL Direct - All 45 versions

Stationary sunspot equilibria in a finance constrained economy

M Woodford - Journal of Economic Theory, 1986 - Elsevier
Abstract Stationary sunspot equilibria are shown to exist in a production economy with
infinite lived agents, when it is not possible to borrow against future wage income.
Equilibrium fluctuations exhibit persistence over time scales of the same order of ...
Cited by 261 - Related articles - All 4 versions

[PDF] Optimal inflation-targeting rules

[PDF] from nber.org
M Giannoni… - 2004 - nber.org
An increasingly popular approach to the conduct of monetary policy, since the early 1990s,
has been inflation-forecast targeting. Under this general approach, a central bank is
committed to adjust short-term nominal interest rates periodically so as to ensure that its ...
Cited by 258 - Related articles - View as HTML - BL Direct - All 32 versions

Aggregate fluctuations from independent sectoral shocks: self-organized criticality in a model of production and inventory dynamics

[PDF] from santafe.edu
P Bak, K Chen, J Scheinkman… - Ricerche Economiche, 1993 - Elsevier
Abstract This paper illustrates how fluctuations in aggregate economic activity can result
from many small, independent shocks to individual sectors. The effects of the small
independent shocks fail to cancel in the aggregate due to the presence of two non- ...
Cited by 237 - Related articles - BL Direct - All 8 versions

Equilibrium models displaying endogenous fluctuations and chaos* 1:: A survey

[PDF] from ucla.edu
M Boldrin… - Journal of Monetary Economics, 1990 - Elsevier
Abstract This paper surveys current developments in dynamic general equilibrium theory
concerned with conditions under which endogenous fluctuations are possible. Existing
contributions are divided into two classes: the larger one consists of models with a unique ...
Cited by 233 - Related articles - All 10 versions

Optimal interest-rate rules: I. General theory

[PDF] from psu.edu
MP Giannoni… - 2003 - nber.org
This paper proposes a general method for deriving an optimal monetary policy rule in the
case of a dynamic linear rational-expectations model and a quadratic objective function for
policy. A commitment to a rule of the type proposed results in a determinate equilibrium in ...
Cited by 227 - Related articles - BL Direct - All 20 versions

Inflation stabilization and welfare: The case of a distorted steady state

[PDF] from luiss.it
P Benigno… - Journal of the European Economic …, 2005 - Wiley Online Library
This paper considers the appropriate stabilization objectives for monetary policy in a micro-
founded model with staggered price-setting. Rotemberg and Woodford (1997) and
Woodford (2002) have shown that under certain conditions, a local approximation to the ...
Cited by 217 - Related articles - BL Direct - All 36 versions

Optimal Interest‐Rate Smoothing

[PDF] from columbia.edu
M Woodford - Review of Economic Studies, 2003 - Wiley Online Library
This paper considers the desirability of the observed tendency of central banks to adjust
interest rates only gradually in response to changes in economic conditions. It shows, in the
context of a simple model of optimizing private-sector behaviour, that assignment of an ...
Cited by 213 - Related articles - BL Direct - All 17 versions

Monetary policy in a world without money

[PDF] from mecon.gov.ar
M Woodford - International Finance, 2000 - Wiley Online Library
2. Abstract This paper considers whether the development of 'electronic money'poses any
threat to the ability of central banks to control the value of their national currencies through
conventional monetary policy. It argues that, even if the demand for base money for use in ...
Cited by 201 - Related articles - BL Direct - All 13 versions

Doing without money: controlling inflation in a post-monetary world

[PDF] from psu.edu
M Woodford - 1997 - nber.org
This paper shows that it is possible to analyze equilibrium inflation determination without
any reference to either money supply or demand, as long as one specifies policy in terms of
a Wicksellian'interest-rate feedback rule. This approach should be of considerable interest ...
Cited by 196 - Related articles - BL Direct - All 22 versions

The optimum quantity of money

M Woodford - Handbook of monetary economics, 1990 - Elsevier
* I would like to thank Tim Kehoe and David Levine for extremely helpful discussions of the issues
treated here, and Buz Brock, Robert Lucas, Bennett McCallum, Julio Rotemberg, and the editors
for helpful comments on an earlier draft. I would also like to thank the Institute for ...
Cited by 195 - Related articles - All 4 versions

Real-business-cycle models and the forecastable movements in output, hours, and consumption

[PDF] from bu.edu
JJ Rotemberg… - The American Economic Review, 1996 - JSTOR
We study the movements in output, consumption and hours that are forecastable from a VAR
and analyze how they differ from those predicted by standard real-business-cycle models.
We show that actual forecastable movements in output have a variance about one ...
Cited by 191 - Related articles - BL Direct - All 10 versions

[BOOK] Credit frictions and optimal monetary policy

[PDF] from nber.org
V Cúrdia, M Woodford… - 2009 - nber.org
Abstract We extend the basic (representative-household) New Keynesian [NK] model of the
monetary transmission mechanism to allow for a spread between the interest rate available
to savers and borrowers, that can vary for either exogenous or endogenous reasons. We ...
Cited by 188 - Related articles - View as HTML - All 107 versions

Public debt as private liquidity

M Woodford - The American Economic Review, 1990 - JSTOR
There has been a great deal of public concern in the United States about the rapid growth of
the public debt during the 1980s. Among economists, the grounds for concern most often
stressed are that a higher public debt should reduce national savings (and, as a result, ...
Cited by 170 - Related articles - All 7 versions

Pitfalls of forward-looking monetary policy

M Woodford - The American economic review, 2000 - JSTOR
A distinctive feature of the procedures recently adopted by inflation-targeting central banks is
their forward-looking character. Forecasts of the economy's future evolution conditional upon
alternative policies play a central role in the banks' deliberations, to an extent that the ...
Cited by 160 - Related articles - BL Direct - All 12 versions

[BOOK] Handbook of monetary economics

BM Friedman… - 2010 - books.google.com
What tools are available for setting and analyzing monetary policy? World-renowned
contributors examine recent evidence on subjects as varied as price-setting, inflation
persistence, the private sector's formation of inflation expectations, and the monetary ...
Cited by 161 - Related articles - All 10 versions

[PDF] Nonstandard indicators for monetary policy: can their usefulness be judged from forecasting regressions?

[PDF] from nber.org
M Woodford - 1994 - nber.org
In recent years there has been a great deal of interest in proposals to use nonstandard
indicator variables as a guide to the conduct of monetary policy. By nonstandard indicators I
mean indicators other than the various measures of the money supply that the Federal ...
Cited by 158 - Related articles - View as HTML - All 6 versions

Monetary policy in the information economy

[PDF] from psu.edu
M Woodford - 2001 - nber.org
This paper considers two challenges that improvements in private-sector information-
processing capabilities may pose for the effectiveness of monetary policy. It first considers
the consequences of improved information about central-bank actions, and argues that ...
Cited by 157 - Related articles - BL Direct - All 30 versions

How important is money in the conduct of monetary policy?

[PDF] from ecb.eu
M Woodford - Journal of Money, Credit and Banking, 2008 - Wiley Online Library
I consider some of the leading arguments for assigning an important role to tracking the
growth of monetary aggregates when making decisions about monetary policy. First, I
consider whether ignoring money means returning to the conceptual framework that ...
Cited by 154 - Related articles - BL Direct - All 61 versions

[BOOK] Handbook of macroeconomics

JB Taylor… - 1999 - books.google.com
Purpose The Handbook of Macroeconomics aims to provide a survey of the state of
knowledge in the broad area that includes the theories and facts of economic growth and
economic fluctuations, as well as the consequences of monetary and fiscal policies for ...
Cited by 149 - Related articles - All 8 versions

Endogenous fluctuations

R Guesnerie… - Advances in Economic Theory: …, 1992 - books.google.com
Economic time series usually display deviations from their trends that, although irregular,
have recurrent patterns. The explanation of such patterns of fluctuations is a subject that has
received considerable attention from the economics profession.
Cited by 150 - Related articles - All 4 versions

Self-organized criticality and economic fluctuations

JA Scheinkman… - The American Economic Review, 1994 - JSTOR
Economists have long been interested in explaining the observed instability of economic
aggregates. Though several reasons for variation in the pace of production are easily given,
such as exogenous variation in tastes or in production possibilities, it is hard to see why ...
Cited by 150 - Related articles - BL Direct - All 8 versions

Convergence in macroeconomics: Elements of the new synthesis

[PDF] from univ-paris1.fr
M Woodford - American Economic Journal: Macroeconomics, 2009 - ingentaconnect.com
Abstract: While macroeconomics is often thought of as a deeply divided field, with less of a
shared core and correspondingly less cumulative progress than other areas of economics,
in fact, there are fewer fundamental disagreements among macroeconomists now than in ...
Cited by 143 - Related articles - All 12 versions

Credit spreads and monetary policy

[PDF] from frb.org
V Cúrdia… - 2009 - nber.org
We consider the desirability of modifying a standard Taylor rule for a central bank's interest-
rate policy to incorporate either an adjustment for changes in interest-rate spreads (as
proposed by Taylor [2008] and by McCulley and Toloui [2008]) or a response to variations ...
Cited by 141 - Related articles - All 35 versions

[PDF] Public debt and the price level

[PDF] from northwestern.edu
M Woodford - Conference on Government Debt …, 1998 - faculty.econ.northwestern.edu
Abstract This paper considers whether monetary and fiscal policy may sensibly be
formulated independently of one another, and argues that the reasons for the two to be
interconnected go well beyond the familiar but unappealing possibility of using ...
Cited by 131 - Related articles - View as HTML - All 8 versions

Indicator variables for optimal policy under asymmetric information

[PDF] from psu.edu
LEO Svensson… - Journal of Economic Dynamics and Control, 2004 - Elsevier
The optimal weights on indicators in models with partial information about the state of the
economy and forward-looking variables are derived and interpreted, both for equilibria
under discretion and under commitment. The private sector is assumed to have more ...
Cited by 128 - Related articles - BL Direct - All 24 versions

Firm-specific capital and the New-Keynesian Phillips curve

[PDF] from uni-muenchen.de
M Woodford - 2005 - nber.org
A relation between inflation and the path of average marginal cost (often measured by unit
labor cost) implied by the Calvo (1983) model of staggered pricing---sometimes referred to
as the" new-Keynesian Phillips curve"---has been the subject of extensive econometric ...
Cited by 129 - Related articles - All 25 versions

Optimal interest-rate rules: II. Applications

[PDF] from psu.edu
MP Giannoni… - 2003 - nber.org
In this paper we calculate robustly optimal monetary policy rules for several variants of a
simple optimizing model of the monetary transmission mechanism with sticky prices and/or
wages. We discuss representations of optimal policy both in terms of interest-rate ...
Cited by 126 - Related articles - BL Direct - All 21 versions

[PDF] Introduction to" The Inflation-Targeting Debate"

[PDF] from nber.org
BS Bernanke… - 2004 - nber.org
Since about 1990, a significant number of industrialized and middle-income countries have
adopted inflation targeting as their framework for making monetary policy. As the name
suggests, in an inflation-targeting regime the central bank is responsible for achieving a ...
Cited by 120 - Related articles - View as HTML - All 11 versions

Simple analytics of the government expenditure multiplier

[PDF] from bcrp.gob.pe
M Woodford - 2010 - nber.org
This paper explains the key factors that determine the effectiveness of government
purchases as a means of increasing output and employment in New Keynesian models,
through a series of simple examples that can be solved analytically. Delays in the ...
Cited by 124 - Related articles - All 22 versions

Stationary Sunspot Equilibria-The Case of Small Fluctuations around a Deterministic Steady State

M Woodford - 1986 - Citeseer
Abstract It is shown that stationary sunspot equilibria exist near a deterministic steady state
of a stationary economy not subject to exogenous shocks, if and only if there exists a
continuum of (non-stationary) perfect foresight equilibria converging asymptotically to that ...
Cited by 110 - Related articles - Cached

Self-fulfilling prophecies and the business cycle

[PDF] from rogerfarmer.com
REA Farmer… - Macroeconomic Dynamics, 1997 - Cambridge Univ Press
We demonstrate that multiple stationary rational-expectations equilibria exist in a version of
Lucas's island economy. The existence of these equilibria follows from the fact that there is
an indeterminate set of monetary equilibria in the two-period overlappinggenerations ...
Cited by 108 - Related articles - BL Direct - All 12 versions

[PDF] Indeterminacy of equilibrium in the overlapping generations model: a survey

[PDF] from columbia.edu
M Woodford - Columbia University manuscript, 1984 - columbia.edu
One of the most important properties of competitive equilibrium, in the familiar model with a
finite number of agents and a finite number of commodities, is that under generically valid
conditions, equilibrium will be locally unique. This property is necessary in order for it to ...
Cited by 102 - Related articles - All 3 versions

Information-constrained state-dependent pricing

[PDF] from u-tokyo.ac.jp
M Woodford - Journal of Monetary Economics, 2009 - Elsevier
A model is presented in which decisions about when to review a firm's existing price must be
made on the basis of imprecise awareness of current market conditions. Imperfect
information is endogenized using a variant of the theory of “rational inattention” proposed ...
Cited by 102 - Related articles - All 54 versions

[PDF] Inflation targeting and optimal monetary policy

[PDF] from stlouisfed.org
M Woodford - REVIEW-FEDERAL RESERVE BANK OF …, 2004 - research.stlouisfed.org
Since the early 1990s, an increasing number of countries have adopted explicit inflation
targets as the defining principle that should guide the conduct of monetary policy. This
development is often credited with having brought about substantial reductions in both the ...
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Self-fulfilling expectations and fluctuations in aggregate demand

M Woodford - 1990 - nber.org
ABSTRACT The paper presents an Intertemporal general equilibrium model with rationing in
the Droduct market, in which stationary sunspot equilibria are shown to exist, indicating the
possibility of fluctuations in economic activity simply due to self-fulfilling variations in ...
Cited by 94 - Related articles - All 7 versions

Linear-quadratic approximation of optimal policy problems

[PDF] from psu.edu
P Benigno… - Journal of Economic Theory, 2011 - Elsevier
We consider a general class of nonlinear optimal policy problems with forward-looking
constraints, and show how to derive a problem with linear constraints and a quadratic
objective that approximates the exact problem. The solution to the LQ approximate ...
Cited by 93 - Related articles - BL Direct - All 23 versions

[PDF] Revolution and evolution in twentieth-century macroeconomics

[PDF] from iastate.edu
M Woodford - Unpublished mimeo, 1999 - econ2.econ.iastate.edu
The twentieth century has seen profound progress in economic thought. This has been
associated, among other things, with the progress of economics to a fully autonomous
disciplinary status, which had only begun to be established late in the nineteenth century, ...
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[CITATION] A neo-Wicksellian framework for the analysis of monetary policy

M Woodford - mimeograph, Princeton University, 2000
Cited by 81 - Related articles

[PDF] Globalization and monetary control

[PDF] from nber.org
M Woodford - 2007 - nber.org
Abstract It has recently become popular to argue that globalization has had or will soon have
dramatic consequences for the nature of the monetary transmission mechanism, and it is
sometimes suggested that this could threaten the ability of national central banks to ...
Cited by 80 - Related articles - View as HTML - BL Direct - All 20 versions

[BOOK] Handbook of Macroeconomics

M Woodford - 1999 - books.google.com
Part 6: Financial Markets and the Macroeconomy. 19. Asset prices, consumption, and the
business cycle (JY Campbell). 20. Human behavior and the efficiency of the financial system
(RJ Shiller). 21. The financial accelerator in a quantitative business cycle framework (B. ...
Cited by 75 - Related articles - All 2 versions

Conventional and unconventional monetary policy

[PDF] from stlouisfed.org
V Cúrdia… - 2009 - papers.ssrn.com
Abstract: We extend a standard New Keynesian model both to incorporate heterogeneity in
spending opportunities along with two sources of (potentially time-varying) credit spreads
and to allow a role for the central bank's balance sheet in determining equilibrium. We use ...
Cited by 77 - Related articles - All 63 versions

Optimal monetary policy in a liquidity trap

[PDF] from psu.edu
GB Eggertsson… - 2003 - nber.org
We consider the consequences for monetary policy of the zero floor for nominal interest
rates. The zero bound can be a significant constraint on the ability of a central bank to
combat deflation. We show, in the context of an intertemporal equilibrium model, that open ...
Cited by 72 - Related articles - BL Direct - All 15 versions

[CITATION] Price-level determination under interest-rate rules

M Woodford - unpublished, Princeton University, 1999
Cited by 71 - Related articles

Real effects of monetary shocks in an economy with sequential purchases

[PDF] from columbia.edu
RE Lucas Jr… - 1993 - nber.org
We study the effects of monetary disturbances in an economy in which sellers must deal with
potential buyers in sequence, rather than being able to sell their goods in a Walrasian
auction market. Because of the structure of trading assumed, the current state of demand ...
Cited by 67 - Related articles - BL Direct - All 9 versions

The central-bank balance sheet as an instrument of monetary policy

[PDF] from psu.edu
V Cúrdia… - 2010 - nber.org
While many analyses of monetary policy consider only a target for a short-term nominal
interest rate, other dimensions of policy have recently been of greater importance: changes
in the supply of bank reserves, changes in the assets acquired by central banks, and ...
Cited by 70 - Related articles - All 45 versions

How forward-looking is optimal monetary policy?

[PDF] from nyfedeconomists.org
MP Giannoni… - Journal of Money, Credit and Banking, 2003 - JSTOR
We calculate optimal monetary policy rules for several variants of a simple optimizing model
of the monetary transmission mechanism with sticky prices and/or wages. We show that
robustly optimal rules can be represented by interest-rate feedback rules that generalize ...
Cited by 63 - Related articles - BL Direct - All 23 versions

[PDF] Optimal monetary and fiscal policy in a liquidity trap

[PDF] from nber.org
GB Eggertsson… - NBER International Seminar on …, 2006 - nber.org
Recent developments in both Japan and the US have brought new attention to the question
of how policy should be conducted when short-term nominal interest rates reach a level
below which no further interest-rate declines are possible (as in Japan), or below which ...
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[PDF] The optimum quantity of money revisited

[PDF] from dklevine.com
TJ Kehre, DK Levine… - 1992 - dklevine.com
The accepted wisdom on the optimum quantity of money was first expressed by Friedman
(1953, 1969): Real money balances represent a service to the economy provided by the
government at no cost. The government should maximize the quantity of real balances it ...
Cited by 62 - Related articles - All 13 versions

The case for forecast targeting as a monetary policy strategy

M Woodford - The Journal of Economic Perspectives, 2007 - JSTOR
At central banks around the world, forecasts have come to play an increas-ingly important
role both in policy deliberations and in communications with the public. The most striking
examples are the Bank of England, Sweden's Riksbank, Norway's Norges Bank, and the ...
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[BOOK] Expectations, finance and aggregate instability

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M Woodford… - 1986 - econ.as.nyu.edu
ABSTRACT Several models are discussed in which aggregate fluctuations result from
selffulfilling revisions of agents' expectations (" sunspot equilibria")-It is shown that this is
possible in models with infinite lived agents if financial markets are imperfect; both cash-in ...
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Imperfect financial intermediation and complex dynamics

M Woodford - Cycles and Chaos in Economic Equilibrium, …, 1992 - books.google.com
IT is NOW well established that self-sustaining fluctuations, either periodic or" chaotic," can
occur as a perfect foresight equilibrium phenomenon in wellformulated models of
competitive economies. However, existing examples have thus far relied upon parameter ...
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Optimal taxation in an RBC model: A linear-quadratic approach

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P Benigno… - Journal of Economic Dynamics and Control, 2006 - Elsevier
We reconsider the optimal taxation of income from labor and capital in the stochastic growth
model analyzed by Chari et al.[1994. Optimal fiscal policy in a business cycle model. Journal
of Political Economy 102, 617–652; 1995. Policy analysis in business cycle models. In: ...
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Robustly Optimal Monetary Policy with Near Rational Expectations

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M Woodford - 2005 - nber.org
The paper considers optimal monetary stabilization policy in a forward-looking model, when
the central bank recognizes that private-sector expectations need not be precisely model-
consistent, and wishes to choose a policy that will be as good as possible in the case of ...
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Optimal stabilization policy when wages and prices are sticky: The case of a distorted steady state

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P Benigno… - 2004 - nber.org
Erceg et al.(2000) show that when both wages and prices are sticky, maximization of
expected utility is equivalent to minimizing a loss function with three terms, involving
measures of the variability of wage inflation, price inflation and the output gap respectively ...
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Determinacy of equilibrium in stationary economies with both finite and infinite lived consumers

WJ Muller… - Journal of Economic Theory, 1988 - Elsevier
Abstract We consider the determinacy of perfect foresight equilibrium near steady-state
equilibria of stationary infinite-horizon economies. The work of TJ Kehoe and DK Levine
(Econometrica53 (1985), 433–453) is generalized by the inclusion of both infinite lived ...
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Interpreting inflation persistence: Comments on the conference on “Quantitative evidence on price determination”

M Woodford - Journal of Money, Credit and Banking, 2007 - Wiley Online Library
... Interpreting Inflation Persistence: Comments on the Conference on “Quantitative Evidence
on Price Determination”. MICHAEL WOODFORD. ... More content like this. Find more content:
like this article. Find more content written by: MICHAEL WOODFORD. ...
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Stability of cycles with adaptive learning rules

R Guesnerie… - Equilibrium theory and applications: …, 1991 - books.google.com
This chapter considers the problem of stability of learning procedures in a dynamical system
that is one-dimensional and one-step forward-looking. Such dynamical systems have often
been studied in the economic literature when, for example, they are associated with ...
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Financial intermediation and macroeconomic analysis

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M Woodford - The Journal of Economic Perspectives, 2010 - ingentaconnect.com
Abstract: Understanding phenomena such as the recent financial crisis, and possible policy
responses, requires the use of a macroeconomic framework in which financial
intermediation matters for the allocation of resources. Neither standard macroeconomic ...
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[PDF] Indeterminacy of stationary equilibrium in stochastic overlapping generations models.

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SE Spear, S Srivastava… - Journal of Economic …, 1990 - littlehurt.gsia.cmu.edu
In this paper, we examine the local uniqueness properties of stationary rational expectations
equilibria in a stochastic overlapping generations model. The question of local uniqueness
of equilibrium has recently been the focus of much attention. Since the classic result of ...
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[CITATION] Interest rates and prices

M Woodford - 2003 - Princeton University Press
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Policy options in a liquidity trap

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GB Eggertsson… - The American Economic Review, 2004 - JSTOR
The specter of a" liquidity trap," originally proposed as a theoretical possibility by John
Maynard Keynes (1936) but long considered to be of doubtful practical relevance, has
recently created alarm among the world's central banks. In Japan, the overnight rate has ...
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[CITATION] Comment

M Woodford - NBER Macroeconomics Annual, 2011 - JSTOR
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[PDF] Financial market efficiency and the effectiveness of monetary policy

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M Woodford - Federal Reserve Bank of New York Economic …, 2002 - data.newyorkfed.org
mprovements in information processing technology and deregulation, among other forces,
are profoundly transforming the financial sector of the United States and other advanced
economies. Many of these changes are likely to improve the efficiency of financial ...
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Gross substitutability in large-square economies

[PDF] from 50.16.184.107
TJ Kehoe, DK Levine, A Mas-Colell… - Journal of Economic …, 1991 - Elsevier
Abstract This paper investigates the implications of gross substitutability of excess demand
functions for the equilibria of exchange economies with countably many goods and
arbitrarily many consumers. We provide uniqueness theorems for general models. We ...
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Loan commitments and optimal monetary policy

M Woodford - Journal of Monetary Economics, 1996 - Elsevier
With loan commitments negotiated in advance, the use of 'tight money'to restrain nominal
spending has asymmetric effects upon different categories of borrowers. This can reduce
efficiency, even though aggregate demand is stabilized. An equilibrium model of financial ...
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[CITATION] Optimizing models with nominal rigidities

M Woodford - Interest and Prices, 2001
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Three questions about sunspot equilibria as an explanation of economic fluctuations

M Woodford - The American Economic Review, 1987 - JSTOR
It is by now well known that the sort of difference equations that characterize the equilibrium
conditions of an infinite horizon competitive economy may have solutions in which the
endogenous variables fluctuate in response to" sunspot" variables, that is, to random ...
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Equilibrium models of endogenous fluctuations: an introduction

M Woodford - 1990 - nber.org
ABSTRACT These lectures comment upon recent theoretical modelsof endogenous
fluctuations in economic dynamics, including both the literature on nonlinear deterministic
cycles arid the literature on" sunspot equilibria". Two important themes include (1) reasons ...
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Does a'Two-Pillar Phillips Curve'Justify a Two-Pillar Monetary Policy Strategy?

[PDF] from graduateinstitute.ch
M Woodford - CEPR Discussion Paper No. DP6447, 2007 - papers.ssrn.com
Abstract: Arguments for a prominent role for attention to the growth rate of monetary
aggregates in the conduct of monetary policy are often based on references to low-
frequency reduced-form relationships between money growth and inflation. The'two-pillar ...
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Optimal inflation targeting under alternative fiscal regimes

[PDF] from unirioja.es
P Benigno… - 2006 - nber.org
Standard discussions of flexible inflation targeting as an optimal monetary policy abstract
completely from the consequences of monetary policy for the government budget. But at
least some of the countries now adopting inflation targeting have substantial difficulty in ...
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Structural slumps

M Woodford - Journal of Economic Literature, 1994 - JSTOR
I would like to thank Julio Rotemberg for many important discussions of the issues
addressed here, the Universita2 Commerciale L. Bocconi, Milano, for the opportunity to
develop these ideas in a series of lectures there, and Olivier Blanchard for helpful ...
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[PDF] Inflation and Output Dynamics with Firm-Specific Investment

[PDF] from columbia.edu
M Woodford - Manuscript, Princeton University, 2004 - columbia.edu
This note corrects the analysis given in Woodford (2003, chap. 5) of a model with staggered
pricing and endogenous capital accumulation, to take account of an error in the original
calculations noted by Sveen and Weinke (2004). The main source of complication in this ...
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Optimal policy with partial information in a forward-looking model: Certainty-equivalence redux

[PDF] from columbia.edu
LEO Svensson… - 2003 - nber.org
This paper proves a certainty equivalence result for optimal policy under commitment with
symmetric partial information about the state of the economy in a model with forward-looking
variables. This result is used in our previous paper, Indicator Variables for Optimal Policy,' ...
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