Search Results
Showing results 1 to 8 of approximately 8.
(refine search)
Working Paper
Worldwide macroeconomic stability and monetary policy rules
We study the interaction of multiple large economies in dynamic stochastic general equilibrium. Each economy has a monetary policymaker that attempts to control the economy through the use of a linear nominal interest rate feedback rule. We show how the determinacy of worldwide equilibrium depends on the joint behavior of policymakers worldwide. We also show how indeterminacy exposes all economies to endogenous volatility, even ones where monetary policy may be judged appropriate from a closed economy perspective. We construct and discuss two quantitative cases. In the 1970s, worldwide ...
Journal Article
A closer look at jobless recoveries
Most analysts believe the U.S. economy is now recovering from the recession. Yet businesses continue to lay off workers, prompting The New York Times to dub this "the worst hiring slump in 20 years." Market analysts and economists have a different name for what is happening. They call it a ?jobless recovery.?> The only other jobless recovery in postwar U.S. history occurred following the 1990-91 recession. In the early years of that recovery, forecasting models based on data from past business cycles predicted that the observed pickup in output would be accompanied by employment growth. ...
Speech
Incomplete Credit Markets and Monetary Policy with Heterogeneous Labor Supply : a presentation at Bank of Korea 2016 Conference, Employment and Growth, Seoul, Korea, May 30, 2016.
During an academic talk in Seoul at the Bank of Korea, St. Louis Fed President James Bullard discussed optimal monetary policy when credit markets are incomplete. He examined optimal policy both in ordinary times and in times when the zero lower bound on short-term nominal interest rates is encountered. The presentation was based on a paper in progress with Aarti Singh of the University of Sydney. Bullard also discussed the decline in U.S. labor force participation in recent years and said that the results of the paper may help to inform the debate on whether U.S. monetary policy needs to ...
Working Paper
Nominal GDP Targeting With Heterogeneous Labor Supply
We study nominal GDP targeting as optimal monetary policy in a model with a credit market friction following Azariadis, Bullard, Singh and Suda (2018), henceforth ABSS. As in ABSS, the macroeconomy we study has considerable income inequality which gives rise to a large private sector credit market. Households participating in this market use non-state contingent nominal contracts (NSCNC). We extend the ABSS framework to allow for endogenous and heterogeneous household labor supply among credit market participant households. We show that nominal GDP targeting continues to characterize optimal ...
Working Paper
Incomplete Credit Markets and Monetary Policy
We study monetary policy when private credit markets are incomplete. The macroeconomy we study has a large private credit market, in which participant households use non-state contingent nominal contracts (NSCNC). A second, small group of households only uses cash, supplied by the monetary authority, and cannot participate in the credit market. There is an aggregate shock. We find that, despite the substantial heterogeneity, the monetary authority can provide for optimal risk-sharing in the private credit market and thus overcome the NSCNC friction via a counter-cyclical price level rule. The ...
Journal Article
Jobless recoveries and the wait-and-see hypothesis
In January 2005, after more than three years of sluggish employment growth, the U.S. economy finally recovered the jobs lost during the 2001 recession. Baffled by such a delayed rebound in payrolls, many speculated about the cause. Inevitably, observers compared the 2001 and 1991 recoveries, both widely considered to have been jobless. Schreft and Singh showed previously that one common feature of the first year of the jobless recoveries was the greater use of just-in-time employment practices. They also speculated that the greater availability of just-in-time employment practices contributed ...
Working Paper
Learning and the Great Moderation
We study a stylized theory of the volatility reduction in the U.S. after 1984?the Great Moderation?which attributes part of the stabilization to less volatile shocks and another part to more difficult inference on the part of Bayesian households attempting to learn the latent state of the economy. We use a standard equilibrium business cycle model with technology following an unobserved regime-switching process. After 1984, according to Kim and Nelson (1999a), the variance of U.S. macroeconomic aggregates declined because boom and recession regimes moved closer together, keeping conditional ...