Arbeitspapier
Modest policy interventions
The authors present a framework for computing and evaluating linear projections of macro variables conditional on hypothetical paths of monetary policy. A modest policy intervention is a change in policy that does not significantly shift agents' beliefs about policy regime and does not generate quantitatively important expectations-formation effects of the kind Lucas (1976) emphasizes. The framework is applied to an econometric model of U.S. postwar monetary policy behavior. It finds that a rich class of interventions routinely considered by the Federal Reserve are modest and their impacts can be reliably forecast by an accurately identified linear model. Moreover, modest interventions can matter: They may shift the projected paths and probability distributions of macro variables in economically meaningful ways.
- Language
-
Englisch
- Bibliographic citation
-
Series: Working Paper ; No. 2002-19
- Classification
-
Wirtschaft
- Subject
-
Monetary policy
Forecasting
Vector autoregression
- Event
-
Geistige Schöpfung
- (who)
-
Leeper, Eric M.
Zha, Tao
- Event
-
Veröffentlichung
- (who)
-
Federal Reserve Bank of Atlanta
- (where)
-
Atlanta, GA
- (when)
-
2002
- Handle
- Last update
-
20.09.2024, 8:21 AM CEST
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Leeper, Eric M.
- Zha, Tao
- Federal Reserve Bank of Atlanta
Time of origin
- 2002
Other Objects (12)
Bankruptcy law, capital allocation, and aggregate effects: a dynamic heterogeneous agent model with incomplete markets
Identification, vector autoregression, and block recursion
Modest policy interventions
Modest policy interventions
Were there regime switches in U.S. monetary policy?
Assessing simple policy rules: a view from a complete macro model
Identifying monetary policy in a small open economy under flexible exchange rates
Assessing the macroeconomic impact of bank intermediation shocks: A structural approach
Confronting model misspecification in macroeconomics
Bayesian methods for dynamic multivariate models
Quantifying the half-life of deviations from PPP: The role of economic priors
Conditional forecasts in dynamic multivariate models
Bankruptcy law, capital allocation, and aggregate effects: a dynamic heterogeneous agent model with incomplete markets
Identification, vector autoregression, and block recursion
Modest policy interventions
Modest policy interventions
Were there regime switches in U.S. monetary policy?
Assessing simple policy rules: a view from a complete macro model
Identifying monetary policy in a small open economy under flexible exchange rates
Assessing the macroeconomic impact of bank intermediation shocks: A structural approach
Confronting model misspecification in macroeconomics
Bayesian methods for dynamic multivariate models
Quantifying the half-life of deviations from PPP: The role of economic priors
Conditional forecasts in dynamic multivariate models
Bankruptcy law, capital allocation, and aggregate effects: a dynamic heterogeneous agent model with incomplete markets
Identification, vector autoregression, and block recursion
Modest policy interventions
Modest policy interventions
Were there regime switches in U.S. monetary policy?
Assessing simple policy rules: a view from a complete macro model
Identifying monetary policy in a small open economy under flexible exchange rates
Assessing the macroeconomic impact of bank intermediation shocks: A structural approach
Confronting model misspecification in macroeconomics
Bayesian methods for dynamic multivariate models
Quantifying the half-life of deviations from PPP: The role of economic priors