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Central Bank Policy: Theory and Practice
Type: Book
ISBN: 978-1-78973-751-6

Book part
Publication date: 12 November 2014

Camille Cornand and Frank Heinemann

In this article, we survey experiments that are directly related to monetary policy and central banking. We argue that experiments can also be used as a tool for central bankers…

Abstract

In this article, we survey experiments that are directly related to monetary policy and central banking. We argue that experiments can also be used as a tool for central bankers for bench testing policy measures or rules. We distinguish experiments that analyze the reasons for non-neutrality of monetary policy, experiments in which subjects play the role of central bankers, experiments that analyze the role of central bank communication and its implications, experiments on the optimal implementation of monetary policy, and experiments relevant for monetary policy responses to financial crises. Finally, we mention open issues and raise new avenues for future research.

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Experiments in Macroeconomics
Type: Book
ISBN: 978-1-78441-195-4

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Book part
Publication date: 1 July 2015

Nikolay Markov

This chapter investigates the predictability of the European monetary policy through the eyes of the professional forecasters from a large investment bank. The analysis is based…

Abstract

This chapter investigates the predictability of the European monetary policy through the eyes of the professional forecasters from a large investment bank. The analysis is based on forward-looking Actual and Perceived Taylor Rules for the European Central Bank which are estimated in real-time using a newly constructed database for the period April 2000–November 2009. The former policy rule is based on the actual refi rate set by the Governing Council, while the latter is estimated for the bank’s economists using their main point forecast for the upcoming refi rate decision as a dependent variable. The empirical evidence shows that the pattern of the refi rate is broadly well predicted by the professional forecasters even though the latter have foreseen more accurately the increases rather than the policy rate cuts. Second, the results point to an increasing responsiveness of the ECB to macroeconomic fundamentals along the forecast horizon. Third, the rolling window regressions suggest that the estimated coefficients have changed after the bankruptcy of Lehman Brothers in October 2008; the ECB has responded less strongly to macroeconomic fundamentals and the degree of policy inertia has decreased. A sensitivity analysis shows that the baseline results are robust to applying a recursive window methodology and some of the findings are qualitatively unaltered from using Consensus Economics forecasts in the regressions.

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Monetary Policy in the Context of the Financial Crisis: New Challenges and Lessons
Type: Book
ISBN: 978-1-78441-779-6

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Abstract

Details

Central Bank Policy: Theory and Practice
Type: Book
ISBN: 978-1-78973-751-6

Abstract

Details

Central Bank Policy: Theory and Practice
Type: Book
ISBN: 978-1-78973-751-6

Abstract

Details

Central Bank Policy: Theory and Practice
Type: Book
ISBN: 978-1-78973-751-6

Abstract

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Understanding Financial Stability
Type: Book
ISBN: 978-1-78756-834-1

Book part
Publication date: 23 May 2019

Zoya A. Pilipenko

The chapter contains a methodology for formalized evaluation of the role of the Central Bank of the Russian Federation (Bank of Russia) in ensuring monetary and financial…

Abstract

The chapter contains a methodology for formalized evaluation of the role of the Central Bank of the Russian Federation (Bank of Russia) in ensuring monetary and financial sustainability with the help of the monetary policy transmission mechanism and its inflation target regime. The significance of the research of the Bank of Russia operations to ensure financial sustainability is due to a number of circumstances: the uniqueness of the Bank of Russia that appeared only 27 years ago and experienced several devastating events related to the 1998 financial crisis, the global financial crisis of 2008–2009, and the stagnation of the Russian economy in 2014–2016, as well as high volatility of world prices for Russian commodity exports and the latest contra-Russian sanctions that significantly affected the volatility of the Russian ruble. Taking into account all the above, the issue of the Bank of Russia’s effective activities in the long run is aggravated by the fact that there are still more open questions than proven relationships of causes and effects regarding the potential of specific monetary policy instruments in the context of low-growth and high-volatility environment. The modeling of the Bank of Russia strategic and operational targets has been based on the parameters’ dependencies presented by the money (credit) multiplier in the interpretation of G. Schinasi (2006) and on the instability of stable economy hypothesis of H. Minsky (2008). As a result, there have been established the marginal levels of definite indicators of the banking system performance that could allow the Bank of Russia to ensure financial sustainability in the low-growth and high-volatility environment.

Book part
Publication date: 2 March 2011

Csaba Csavas, Szilard Erhart, Anna Naszodi and Klara Pinter

There is ample empirical evidence in the literature for the positive effect of central bank transparency on the economy. The main channel is that transparency reduces the…

Abstract

There is ample empirical evidence in the literature for the positive effect of central bank transparency on the economy. The main channel is that transparency reduces the uncertainty regarding future monetary policy and thereby it helps agents to make better investment and saving decisions. In this chapter, we document how the degree of transparency of central banks in Central and Eastern Europe has changed during periods of financial stress, and we argue that during the recent financial crisis central banks became less transparent. We investigate also how these changes affected the uncertainty in these economies, measured by the degree of disagreement across professional forecasters over the future short- and long-term interest rates and also by their forecast accuracy.

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The Impact of the Global Financial Crisis on Emerging Financial Markets
Type: Book
ISBN: 978-0-85724-754-4

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Abstract

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Central Bank Policy: Theory and Practice
Type: Book
ISBN: 978-1-78973-751-6

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