Table of Contents

Exchange Rate Regimes and Persistence of Inflation in Thailand

Komain Jiranyakul, National Institute of Development Administration

Wicksell, Keynes, and the New Neoclassical Synthesis: What Can We Learn for Monetary Policy?

Roberto Tamborini, University of Trento - Department of Economics and Management
Hans�Michael Trautwein, Carl von Ossietzky UniversitÀt Oldenburg, ZenTra - Center for Transnational Studies
Ronny Mazzocchi, University of Trento - Department of Economics

Identifying Central Bank Liquidity Super-Spreaders in Interbank Funds Networks

Carlos LeĂłn, Banco de la RepĂșblica (Central Bank of Colombia), Universidad del Rosario
Clara LĂ­a Machado, Banco de la Republica
Miguel Sarmiento, Banco de la RepĂșblica

Time Varying Forecasting Performance of the Federal Reserve

Ozan Eksi, Independent
Bedri Kamil Onur Tas, TOBB University of Economics and Technology - Department of Economics

The Discursive Dilemma in Monetary Policy

Carl Andreas Claussen, Sveriges Riksbank
Øistein RÞisland, Central Bank of Norway - Department of Economics


MACROECONOMICS: MONETARY & FISCAL POLICIES eJOURNAL

"Exchange Rate Regimes and Persistence of Inflation in Thailand" Free Download

KOMAIN JIRANYAKUL, National Institute of Development Administration
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This paper explored the degree of inflation persistence in Thailand using both headline and sectoral CPI indices during the 1985-2012 period. The results showed that the degree of persistence was low across the fixed and floating exchange rate regimes. The mean shifts appeared to be mostly negative by the impact of switching from fixed to floating exchange rate regime. Furthermore, there seemed to be monetary accommodation of inflation persistence in both regimes. However, some negative mean shifts in the inflation process might be resulted from the impact of inflation targeting implemented in May 2000 and regular price controls of foods and energy items.

"Wicksell, Keynes, and the New Neoclassical Synthesis: What Can We Learn for Monetary Policy?" Fee Download
Economic Notes, Vol. 43, Issue 2, pp. 79-114, 2014

ROBERTO TAMBORINI, University of Trento - Department of Economics and Management
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HANS�MICHAEL TRAUTWEIN, Carl von Ossietzky UniversitÀt Oldenburg, ZenTra - Center for Transnational Studies
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RONNY MAZZOCCHI, University of Trento - Department of Economics
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The New Neoclassical Synthesis (NNS) provides the established macroeconomic foundation for monetary policy. The Great Recession has, however, unveiled a number of unresolved issues. Prominent scholars have stressed the connections of the NNS with the founders of macroeconomic thought, Wicksell and Keynes. Our main contention is that the NNS fails to consider, and learn from, the hallmark of Wicksell's and Keynes's approaches to business cycles, namely investment–saving imbalances (ISI). Systematic studies of macroeconomic instability, and notably the Great Recession, give prominence to this phenomenon. Drawing on Wicksell's and Keynes's insights, this paper provides a framework to deal with ISI and monetary policy according to modern theoretical standards and techniques (e.g. agents seek to optimize intertemporally and markets clear). Section 2 of the paper clarifies some basic theoretical issues underlying the NNS visâ€?Ă â€?vis Wicksell and Keynes. Section 3 presents a dynamic model whereby it is possible to assess some basic issues concerning the macroeconomics of ISI that are at variance with the NNS. Section 4 shows how system stabilization can be achieved by means of a ‘Wicksellian’ interestâ€?rate rule, which, however, displays dynamic features and conditions that differ from the current NNS consensus. Central banks may thus learn that ISI deserve careful symptom monitoring, and that they require greater attention to the dynamic stability of choices of policy reaction functions.

"Identifying Central Bank Liquidity Super-Spreaders in Interbank Funds Networks" Free Download
CentER Discussion Paper Series No. 2014-037

CARLOS LEÓN, Banco de la RepĂșblica (Central Bank of Colombia), Universidad del Rosario
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CLARA LĂ?A MACHADO, Banco de la Republica
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MIGUEL SARMIENTO, Banco de la RepĂșblica
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Evidence suggests that the Colombian interbank funds market is an inhomogeneous and hierarchical network in which a few financial institutions fulfill the role of “super-spreadersâ€? of central bank liquidity among market participants. Results concur with evidence from other interbank markets and other financial networks regarding the flaws of traditional direct financial contagion models based on homogeneous and non-hierarchical networks. Also, results provide further evidence about financial networks’ self-organization emerging from complex adaptive financial systems. Our research contributes by (i) examining and characterizing the actual connective structure of interbank funds networks, and (ii) identifying those financial institutions that may be considered as the most important conduits for monetary policy transmission, and the main drivers of contagion risk within the interbank funds market. Therefore, we provide new elements for the implementation of monetary policy and for safeguarding financial stability.

"Time Varying Forecasting Performance of the Federal Reserve" Free Download

OZAN EKSI, Independent
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BEDRI KAMIL ONUR TAS, TOBB University of Economics and Technology - Department of Economics
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We examine the change in the superior forecasting performance of the Federal Reserve. We search for structural break(s) in the coefficients of forecast encompassing regressions and estimate time varying path of these coefficients by using Bayesian estimation methods. The analysis of up to date data shows that, for all quarters, the Federal Reserve has private information beyond what is known to commercial forecasters. Although the superiority of the Federal Reserve forecasts decreases for some horizons after Great Moderation, they are still significantly better than commercial forecasts for the entire time period.

"The Discursive Dilemma in Monetary Policy" Fee Download
The Scandinavian Journal of Economics, Vol. 116, Issue 3, pp. 702-733, 2014

CARL ANDREAS CLAUSSEN, Sveriges Riksbank
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ØISTEIN RØISLAND, Central Bank of Norway - Department of Economics
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The discursive dilemma implies that the decision of a board depends on whether the board votes directly on the decision (conclusion�based procedure) or votes on the premises for the decision (premise�based procedure). We derive results showing when the discursive dilemma might occur. Under majority voting, a discursive dilemma can occur either (i) if the relationship between the premise and the decision is non�monotonic, or (ii) if the board members have different judgments on at least two of the premises. Normatively, a premise�based procedure tends to give better decisions when there is disagreement on parameters of the model.

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Macroeconomics: Monetary & Fiscal Policies eJournal

OLIVIER J. BLANCHARD
Class of 1941 Professor of Economics, Massachusetts Institute of Technology (MIT) - Department of Economics, National Bureau of Economic Research (NBER), International Monetary Fund (IMF)

JOHN Y. CAMPBELL
Morton L. and Carole S. Olshan Professor of Economics, Harvard University - Department of Economics, National Bureau of Economic Research (NBER)

STEPHEN G. CECCHETTI
Professor of International Economics, Brandeis International Business School, National Bureau of Economic Research (NBER), Centre for Economic Policy Research (CEPR)

BENJAMIN M. FRIEDMAN
William Joseph Maier Professor of Economics, Harvard University - Department of Economics, National Bureau of Economic Research (NBER)

ROBERT E. HALL
Stanford University - The Hoover Institution on War, Revolution and Peace, National Bureau of Economic Research (NBER)

ROBERT E. LUCAS
John Dewey Distinguished Service Professor, University of Chicago - Department of Economics, National Bureau of Economic Research (NBER)

BENNETT T. MCCALLUM
Professor, Carnegie Mellon University - David A. Tepper School of Business, National Bureau of Economic Research (NBER)

ALLAN H. MELTZER
University Professor of Political Economics, Carnegie Mellon University - David A. Tepper School of Business

FREDERIC S. MISHKIN
Alfred Lerner Professor of Banking and Financial Institutions, Columbia Business School - Finance and Economics, National Bureau of Economic Research (NBER)

PAUL M. ROMER
National Bureau of Economic Research (NBER)

JULIO J. ROTEMBERG
Harvard University - Business, Government and the International Economy Unit, National Bureau of Economic Research (NBER)

MATTHEW D. SHAPIRO
Professor, University of Michigan at Ann Arbor - Department of Economics, Professor, National Bureau of Economic Research (NBER)

ROBERT J. SHILLER
Yale University - Cowles Foundation, National Bureau of Economic Research (NBER), Yale University - International Center for Finance

CHRISTOPHER A. SIMS
Princeton University - Department of Economics, National Bureau of Economic Research (NBER)

JOHN B. TAYLOR
Stanford University