Search Results
Journal Article
The FOMC in 1996: \\"watchful waiting\\"
In light of recent research findings, Michael J. Dueker and Andreas M. Fischer review the 1996 policy posture of the Federal Open Market Committee (FOMC), the monetary policymaking body of the Federal Reserve System. They find several areas in which the FOMC's policy positions were consistent with the conclusions of recent research studies, whether or not these studies directly influenced the Committee's thinking. In general, the authors conclude that the FOMC intended to ensure that inflation was contained near 3 percent in 1996 but did not intend to bring down the trend rate of inflation ...
Journal Article
Open mouth operations: a Swiss case study
Working Paper
Immigrant language barriers and house prices
Are language skills important in explaining the nexus between house prices and immigrant inflows? The language barrier hypothesis says immigrants from a non common language country value amenities more than immigrants from common language countries.> ; In turn, immigrants from non common language countries are less price sensitive to house price changes than immigrants from a common language country. Tests of the language barrier hypothesis with Swiss house prices show that an immigration inflow from a non common language country equal to 1 percent of an area's population is coincident with ...
Journal Article
Do inflation targeters outperform non-targeters?
Ten years of empirical studies of inflation targeting have not uncovered clear evidence that monetary policy that incorporates formal targets imparts better inflation performance. The authors survey the literature and find that the "no difference" verdict concerning inflation targeting has been robust to a wide range of countries and methods of analysis, starting with a study by Dueker and Fischer (1996a). The authors present updated Markov-switching estimates from the original Dueker and Fischer (1996a) article and show that their early conclusions about inflation targeting among early ...
Working Paper
Identifying Austria's implicit monetary target: an alternative test of the "hard currency" policy
One simple test of the long-run viability of an exchange-rate peg, which complements tests based on market expectations, is to ask whether the implicit inflation target ofthe pegging country is the same as that of the anchor country. If the implicit inflation targets of the two countries are different, the peg's long-run credibility can be rejected. The implicit inflation target is defined as the policy-implied, trend rate of inflation. The proposed test is applied to the Austrian experience with a 'hard currency' policy aimed at targeting its exchange rate with the Deutsche mark.
Working Paper
Globalization and inflation in Europe
What is the impact of import competition from other low-wage countries (LWCs) on inflationary pressure in Western Europe? This paper seeks to understand whether labor-intensive exports from emerging Europe, Asia, and other global regions have a uniform impact on producer prices in Germany, France, Italy, Sweden, and the United Kingdom. In a panel covering 110 (4-digit) NACE industries from 1995 to 2008, IV estimates predict that LWC import competition is associated with strong price effects. More specifically, when Chinese exporters capture 1 percent of European market share, producer prices ...
Journal Article
The mechanics of a successful exchange rate peg: lessons for emerging markets
To the surprise of many market watchers, Thailand?s exchange rate peg to the dollar collapsed in July 1997, leading to similar rounds of currency devaluations in other East Asian countries. This study seeks to determine whether there were identifiable contrasts in implementation between Thailand?s peg and a perennially successful peg?Austria?s peg to the Deutsche mark?that would have hinted at problems for Thailand prior to July 1997. The comparison suggests that Thailand was not sufficiently vigilant about keeping its inflation rate low in the early 1990s. By 1995, Thailand faced a situation ...
Working Paper
European hoarding: currency use among immigrants in Switzerland
Do immigrants have a higher demand for large denominated banknotes than natives? This study examines whether cash orders for CHF 1000 notes, a banknote not used for daily transactions, is concentrated in Swiss cities with a high foreign-to-native ratio. Controlling for a range of socio-economic indicators across 250 Swiss cities, European immigrants in Switzerland are found to hoard less CHF 1000 banknotes than natives. A 1 percent increase in the immigrant-to-native ratio leads to a reduction in currency orders by CHF 4000. This negative correlation between immigrant-to-native ratio and ...
Report
Shock identification of macroeconomic forecasts based on daily panels
This paper proposes a new procedure for shock identification of macroeconomic forecasts based on factor analysis. Our identification scheme for information shocks relies on data reduction techniques for daily panels and the recognition that macroeconomic releases exhibit a high level of clustering. A large number of data releases on a single day is of considerable practical interest not only for the estimation but also for the identification of the factor model. The clustering of cross-sectional information facilitates the interpretation of the forecast innovations as real or as nominal ...