Search Results
Conference Paper
Optimal monetary policy and the sacrifice ratio
Working Paper
Towards a compact, empirically verified rational expectations model for monetary policy analysis
This paper extends the sticky-price models of Fuhrer and Moore (1995a,b) to include explicit, optimization-based consumption and investment decisions. The goal is to use the resulting model for monetary policy analysis; consequently, strong emphasis is placed on empirical validation of the model. I use a canonical formulation of the consumer's problem from Campbell and Mankiw (1989), and a time-to-build investment model with costs of adjustment. The restrictions imposed by these models, in conjunction with those imposed on prices and output by the Fuhrer-Moore contracting specification, imply ...
Speech
Should the Fed regularly evaluate its monetary policy framework?: remarks at the Fall 2018 Conference, Brookings Papers on Economic Activity, Brookings Institution, Washington D.C., September 14, 2018
These slides represent the combined perspectives of President Rosengren and his co-authors, Jeffrey C. Fuhrer, Giovanni P. Olivei, and Geoffrey M. B. Tootell.
Discussion Paper
Eyes on the prize: how did the Fed respond to the stock market?
The appropriate role for equity prices in monetary policy deliberations has been hotly debated for some time. Recent work suggests that equity prices have affected monetary policy decisions above and beyond their indirect effect on the traditional goal variables of the FOMC. However, the correlation between stock price movements and these other goal variables has made the identification of the equity price effect problematic. Previous studies have used a forecast that embodies a different information set from the one used by the FOMC, which could bias the estimated coefficient on equity ...
Conference Paper
Technology and growth: conference proceedings
Working Paper
Real expectations: replacing rational expectations with survey expectations in dynamic macro models
This paper examines the implications of changing the expectations assumption that is embedded in nearly all current macroeconomic models. The paper substitutes measured or "real" expectations for rational expectations in an array of standard macroeconomic relationships, as well as in a DSGE model. The author finds that the use of survey measures of expectations ? for near-term inflation, long-term inflation, unemployment, and short-term interest rates ? improves performance along a variety of dimensions. Survey expectations exhibit strong correlations to key macroeconomic variables. Those ...
Working Paper
Intrinsic expectations persistence: evidence from professional and household survey expectations
This paper examines the expectations behavior of individual responses in the Survey of Professional Forecasters, the University of Michigan?s Survey Research Center survey of consumers, and the ECB Survey of Professional Forecasters. It finds that the most robust feature of all of these expectations measures is that respondents inefficiently revise their forecasts, significantly underreacting to new information. As a consequence, revisions smooth through arriving information, and expectations forget past information at a rapid rate and appear to anchor to the unconditional mean or other ...
Conference Paper
Beyond shocks: what causes business cycles? an overview
Journal Article
Goals, guidelines, and constraints facing monetary policymakers: an overview
Central bankers in the United States and abroad must grapple with a broad array of questions about how best to conduct monetary policy. How much should the goal of price stability be emphasized relative to the goal of employment stability? Does central bank independence aid in achieving either or both of these goals? Does a stable, short-run trade-off between inflation and unemployment exist, and can it be exploited by a central bank? What instrument should the central bank manipulate in order to achieve its short-run and long-run goals? ; In June of 1994, the Federal Reserve Bank of Boston ...