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Taeyoung Doh · Dongho Song · Shu-Kuei Yang

This paper proposes a text-based measure of monetary policy stance by modelling FOMC post-meeting statements as convex combinations of the staff-drafted dovish ("alternative A") and hawkish …

Damien Capelle · Yang Liu

This paper analyzes the effectiveness of a tax on inflation policy (TIP)—a fiscal instrument that would require firms to pay a tax proportional to the increase in their prices—as a complement to …

Thomas J. Sargent · Neil Wallace

This paper studies, within a simple "ad hoc" macroeconomic model not derived from individuals' and firms' optimizing behavior but built to resemble the macroeconometric models of the time, how the …

John H. Cochrane

Commenting on Christina and David Romer's claim that active Federal Reserve policy ended postwar recessions, Cochrane argues that their historical narrative cannot distinguish a Fed that reacts to …

James Tobin

This 1969 paper by James Tobin, published in the inaugural issue of the Journal of Money, Credit and Banking, sets out a general-equilibrium framework for monetary analysis built around the capital …

Volha Audzei · Ivan Sutóris

Audzei and Sutóris ask whether inflation-targeting monetary policy affects households' incentives to invest in energy conservation, and whether the standard central bank response to energy price …

John W. Keating · Logan J. Kelly · A. Lee Smith · Victor J. Valcarcel

This 2019 Journal of Money, Credit and Banking paper by John Keating, Logan Kelly, A. Lee Smith, and Victor Valcarcel asks whether replacing the federal funds rate with Divisia M4 (DM4) -- a …

Marco Bassetto · David S Miller

Why do sudden inflations and currency crises occur, while symmetric sudden deflations never do? The paper asks whether treating nominal government bonds as analogous to ordinary corporate bonds — with …

Christina D. Romer · David H. Romer

This 2004 American Economic Review paper by Christina D. Romer and David H.

Pierre-Olivier Gourinchas · Walker Ray · Dimitri Vayanos

The paper develops a two-country preferred-habitat model in which currency and bond markets are populated by different investor clienteles — currency traders with price-elastic demand for foreign …

Tobias Adrian · Christopher Erceg · Marcin Kolasa · Jesper Lindé · Pawel Zabczyk

A microfounded two-country New Keynesian model, calibrated separately to a representative emerging market and a representative advanced economy, in which limited FX-market risk-bearing capacity and an …

Tobias Adrian · Christopher Erceg · Jesper Lindé · Pawel Zabczyk · Jianping Zhou

An empirically-oriented New Keynesian small open economy model, of the kind central banks use, built to quantify when foreign exchange intervention and capital flow management tools improve monetary …

Michael T. Belongia · Peter N. Ireland

This 2022 Journal of Economic Dynamics & Control paper by Michael Belongia and Peter Ireland asks whether a policy rule that steers the growth rate of money, rather than the short-term nominal …

Marco J. Lombardi · Feng Zhu

This 2018 International Journal of Central Banking paper by Marco J. Lombardi and Feng Zhu proposes a "shadow policy rate" for U.S.

Régis Barnichon · Geert Mesters

This 2023 American Economic Review paper by Régis Barnichon and Geert Mesters develops a theoretical framework, with an empirical application to U.S. monetary policy, for evaluating whether current …

Paolo Giordani

This 2004 Journal of Monetary Economics paper by Paolo Giordani offers an analytical and empirical alternative to the Sims (1992) forward-looking-information explanation of the "price puzzle" — the …

Olivier Coibion

This 2012 American Economic Journal: Macroeconomics paper by Olivier Coibion asks why standard recursive VARs and the Romer-Romer (2004) narrative approach produce such different estimates of the real …

Jean Boivin · Marc Giannoni

This 2002 FRBNY Economic Policy Review paper by Jean Boivin and Marc Giannoni asks whether the transmission of monetary policy shocks to U.S. output and inflation changed after the early 1980s, and if …

Jess Benhabib · Stephanie Schmitt-Grohé · Martín Uribe

Because a Taylor-type interest-rate rule must be consistent with the zero nominal-interest-rate bound, it always admits a second, unintended steady state with low or negative inflation alongside the …

Elliot Anenberg · Tess Scharlemann · Eileen van Straelen

Does monetary policy stimulate household borrowing and consumption by enabling cash-out mortgage refinancing ("the cash-out refinance channel"), or does it primarily induce substitution across …

Michael Ehrmann · Phillipp Gnan · Kilian Rieder

This paper investigates the economics of monetary policy leaks — anonymous disclosures of confidential information by insiders to the media — focusing on three central questions: (1) Are leaks random …

Benjamín García · Arsenios Skaperdas

This paper constructs a new measure of political pressure on the Federal Reserve from textual analysis of Fed Chairs' testimonies at Humphrey-Hawkins congressional hearings, and documents that the use …

Manuel Amador · Christopher Phelan

How does noise in the mapping from central bank actions to realized inflation affect the existence and character of reputational equilibria in monetary policy? Specifically, can a central bank that …

Marvin Goodfriend

Classifying Federal Reserve crisis-era interventions into monetary policy, credit policy, and interest-on-reserves policy, Goodfriend argues that only "Treasuries only" monetary policy is fiscally …

John H. Cochrane

Discussing Christina and David Romer's "A New Measure of Monetary Shocks," Cochrane argues the paper's key innovation -- that Greenbook forecasts are a sufficient statistic for the Fed's information …

Ippei Fujiwara · Kiminori Matsuyama

Fujiwara and Matsuyama ask whether the well-documented flattening of the New Keynesian Phillips curve (NKPC) and the concurrent rise in market concentration and markup rates are causally linked or …

Emil Holst Partsch · Ivan Petrella · Emiliano Santoro

Consumer durables account for a disproportionately large share of household expenditure fluctuations despite their small share of total private consumption. Two stylized facts motivate the paper: (1) …

Stefania D'Amico · Iryna Kaminska

Using security-level data on individual corporate bond prices and the Bank of England's published purchase quantities across its gilt purchase programs (QE1: £200bn, QE2: £125bn, QE3: £50bn, QE4: …

Marek Jarociński · Peter Karadi

This 2020 American Economic Journal: Macroeconomics paper by Marek Jarociński and Peter Karadi argues that conventional high-frequency-identified monetary policy surprises conflate two economically …

Zhengyang Chen

This 2026 Journal of Macroeconomics paper by Zhengyang Chen asks why high-frequency monetary policy surprises (MPS) -- changes in short-term interest-rate futures measured in narrow windows around …

Julien Bengui · Louphou Coulibaly

Bengui and Coulibaly ask whether the pattern of capital flows observed during the 2021–2023 global monetary tightening cycle — whereby capital flowed from low-inflation to high-inflation countries — …

John H. Cochrane

Cochrane argues that the standard new-Keynesian account of how a Taylor rule pins down inflation is incomplete -- it works only by assuming the government will follow policies that amount to a threat …

Adrien Auclert · Evan Majic · Matthew Rognlie · Ludwig Straub

Auclert, Majic, Rognlie, and Straub show that the sequence-space Jacobians used to solve macro models with rich heterogeneity have a special "quasi-Toeplitz" mathematical structure, which yields a …

John B. Taylor

This 1993 Carnegie-Rochester Conference paper by John Taylor introduces what became known as the "Taylor rule" — a simple guideline for setting the federal funds rate, r = p + 0.5y + 0.5(p - 2) + 2, …

Stephen G. Cecchetti

This 1995 Federal Reserve Bank of St. Louis Review paper by Stephen Cecchetti surveys the empirical literature attempting to distinguish two competing theories of how monetary policy affects the real …

Refet S. Gürkaynak · Brian Sack · Eric T. Swanson

This 2005 International Journal of Central Banking paper by Refet Gürkaynak, Brian Sack, and Eric Swanson tests whether asset-price responses to FOMC announcements can be adequately characterized by a …

Michael McLeay · Silvana Tenreyro

An emerging view in international macroeconomics contends that dollar invoicing of exports renders monetary policy ineffective for non-U.S. countries: because export prices are allegedly sticky in …

J. Marcus Fleming

This 1962 IMF Staff Papers article by J. Marcus Fleming compares how effective monetary policy and budgetary (fiscal) policy are at stimulating domestic income and output under fixed versus floating …

Timothy Cogley · Thomas J. Sargent

This 2005 Review of Economic Dynamics paper by Timothy Cogley and Thomas J. Sargent extends their earlier Cogley-Sargent (2001) time-varying-parameter VAR (TVP-VAR) of postwar U.S.

Lawrence J. Christiano · Mathias Trabandt · Karl Walentin

This 2011 Handbook of Monetary Economics chapter is a selective survey and original empirical estimation of medium-scale New Keynesian DSGE models for monetary policy analysis. It first works through …

Giacomo Lanzani

This paper asks how an agent who fears that none of their probabilistic models is the correct description of the data-generating process (DGP) should update that fear as evidence accumulates, and what …

Robert E. Lucas Jr.

This 1976 Carnegie-Rochester Conference Series paper by Robert Lucas argues that the standard "theory of economic policy" -- simulating a fixed, estimated econometric model under alternative …

Cynthia L Doniger

This paper asks how the cyclical sensitivity of wages varies with workers' educational attainment, what mechanisms drive the differences, and what the welfare consequences are of ignoring this …

Mariano Kulish · James Morley · Tim Robinson

This 2017 Journal of Monetary Economics paper by Mariano Kulish, James Morley, and Tim Robinson addresses a practical problem in Bayesian estimation of DSGE models: once the policy rate is pinned at …

Hanno Kase · Leonardo Melosi · Matthias Rottner

By treating a nonlinear model's own parameters as extra "pseudo state variables" that a neural network learns to solve for across the entire parameter space at once, and by training a second network …

Brent Bundick · Isabel Cairó · Nicolas Petrosky-Nadeau

This paper investigates whether and how assumptions about household and firm expectations alter the macroeconomic implications of asymmetries commonly embedded in macroeconomic models. Specifically, …

Adrien Auclert · Matthew Rognlie · Martin Souchier · Ludwig Straub

Introducing heterogeneous households with realistically high marginal propensities to consume into an otherwise-standard small open economy New Keynesian model creates a powerful real income channel …

John B. Taylor

Building a simple rational-expectations model of the federal funds market -- a lagged Trading Desk "reaction function" for the supply of Fed balances combined with a demand for balances that depends …

Renato Faccini · Seungcheol Lee · Ralph Luetticke · Morten O. Ravn · Tobias Renkin

How do consumer credit spreads — the gap between household borrowing rates and deposit rates — affect aggregate business cycle dynamics and the distribution of consumption across the wealth …

Pablo Ottonello · Thomas Winberry

Combining high-frequency-identified monetary shocks with Compustat data, the paper shows that low-default-risk firms -- those with lower leverage and higher distance to default -- are substantially …

Priit Jeenas

Contrary to treating corporate cash as simply negative debt, this paper shows that firms' liquid-asset holdings, not their leverage, robustly predict which firms cut investment most after a monetary …

Adrien Auclert · Matthew Rognlie · Ludwig Straub

Auclert, Rognlie, and Straub review a decade of Heterogeneous-Agent New Keynesian (HANK) research through a single canonical model, showing that monetary and balanced-budget fiscal policy have …

Christopher A. Sims

Applying the fiscal theory of the price level's corporate-finance analogy -- fiat (own-currency) government debt behaves like equity, while dollar-denominated or indexed debt behaves like conventional …

Michael Woodford

Woodford argues that commitment to a sound monetary policy rule, such as a Taylor rule, cannot by itself guarantee price stability, because Ricardian equivalence fails to make fiscal policy irrelevant …

Sophocles N. Brissimis · Nicholas S. Magginas

This 2006 Journal of Monetary Economics paper by Sophocles Brissimis and Nicholas Magginas asks whether augmenting a standard monetary VAR with forward-looking information can resolve the "price …

Jeffrey C. Fuhrer

Standard optimising consumption models make spending jump on impact when a shock hits, which the data flatly contradict; replacing time-separable utility with habit formation gives consumers a motive …

Davide Debortoli · Jordi Galí

By building three nested HANK economies and then constructing a deliberately simple two-agent counterpart for each, this paper argues that what household heterogeneity does to aggregate output can be …

David O. Cushman · Tao Zha

This 1997 Journal of Monetary Economics paper by David Cushman and Tao Zha addresses the "exchange rate puzzle" and "price puzzle" that plague conventional recursive (Choleski) VAR studies of monetary …

Jeffery D. Amato · Thomas Laubach

Adding habit formation in consumption to an optimising sticky-price model changes both the IS curve and the Phillips curve, makes the variance of output itself -- not only the output gap -- …

Jonas E Arias · Juan F Rubio-Ramírez · Minchul Shin · Daniel F Waggoner

The paper asks how to conduct valid Bayesian inference in time-varying structural vector autoregressions (SVARs) identified with sign restrictions, a setting in which existing algorithms are shown to …

Robert E. Lucas, Jr.

Surveying and extending the Bailey-Friedman tradition of estimating the welfare cost of inflation, Lucas fits U.S. money-demand data for 1900-1994 and estimates that reducing annual inflation from 10 …

Ben S. Bernanke · Frederic S. Mishkin

This 1997 Journal of Economic Perspectives essay by Ben Bernanke and Frederic Mishkin is a survey and policy assessment, not an empirical study: it draws on comparative experience across the eight …

Ben S. Bernanke · Mark Gertler

This 1995 Journal of Economic Perspectives paper by Ben Bernanke and Mark Gertler surveys the "credit channel" of monetary policy transmission — described explicitly as an amplifying mechanism, not an …

Mikkel Plagborg-Møller · Christian K. Wolf

This 2022 Journal of Political Economy paper by Mikkel Plagborg-Møller and Christian K. Wolf asks what an external instrument (a proxy correlated with one structural shock and uncorrelated with the …

Marvin Goodfriend

Using the 30-year bond rate as a real-time signal of the public's long-run inflation expectations, this narrative study of Fed federal funds rate policy from 1979 to 1992 argues that the central …

Fernando Alvarez · Robert E. Lucas · Warren E. Weber

Reconciling the consensus view that raising short rates fights inflation with the quantity-theoretic evidence that inflation and interest rates move together with money growth in the long run, this …

Serdar Birinci · Fatih Karahan · Yusuf Mercan · Kurt See

The paper asks two related questions: (1) How much, and through which channels, do employer-to-employer (EE) worker transitions affect macroeconomic outcomes — particularly inflation? (2) What is the …

Olivier Blanchard · Jordi Galí

A New Keynesian model is extended with hiring costs that rise in labour market tightness and with real wage rigidity, so that unemployment exists and moves. Under the paper's utility specification the …

Franco Modigliani

This 1944 Econometrica paper by Franco Modigliani builds three alternative macrostatic systems of equations -- a Keynesian system and two classical variants -- that share identical saving, investment, …

John H. Cochrane

Extending the fiscal theory of the price level to long-term government debt, Cochrane shows that the maturity structure of outstanding debt determines whether news about future deficits shows up as …

Max Diegel · Dieter Nautz

This 2021 Journal of Economic Dynamics & Control paper by Max Diegel and Dieter Nautz asks whether U.S. long-term inflation expectations respond to monetary policy shocks in a way consistent with a …

Maximilian Grimm · Òscar Jordà · Moritz Schularick · Alan M. Taylor

This paper provides the first long-run causal evidence that a persistently loose stance of monetary policy — defined as extended periods of low interest rates relative to the neutral rate — …

Morten O. Ravn · Vincent Sterk

A HANK model that is tractable enough to solve on paper, built by grafting Diamond-Mortensen-Pissarides search frictions onto a New Keynesian economy and then imposing assumptions that make the wealth …

Adrien Auclert · Hugo Monnery · Matthew Rognlie · Ludwig Straub

In a heterogeneous-agent New Keynesian model of an energy-importing small open economy, realistically high MPCs combined with a realistically low elasticity of substitution between energy and other …

Michael T. Belongia

This 1996 Journal of Political Economy paper by Michael T. Belongia asks a narrow but consequential question: do the qualitative conclusions of recent monetary economics depend on whether money is …

Ben S. Bernanke · Ilian Mihov

Bernanke and Mihov (1998, QJE) address a measurement problem in the monetary-VAR literature: the era's dominant methods for extracting a "monetary policy shock" -- Cholesky orderings built around the …

Ben S. Bernanke · Jean Boivin · Piotr Eliasz

This 2005 Quarterly Journal of Economics paper by Ben Bernanke, Jean Boivin, and Piotr Eliasz proposes the Factor-Augmented VAR (FAVAR) to address a specific problem with standard small monetary VARs: …

Adrien Auclert · Matthew Rognlie · Ludwig Straub

Estimating a heterogeneous-agent New Keynesian model with "sticky expectations" that simultaneously matches households' large immediate marginal propensities to consume and the hump-shaped aggregate …

Zhengyang Chen · Victor J. Valcarcel

This 2025 Journal of Economic Dynamics and Control paper by Zhengyang Chen and Victor J. Valcarcel proposes a "rational expectations structural VAR" (RE-SVAR) — a way to embed rational expectations …

Leonall C. Andersen · Jerry L. Jordan

This 1968 Federal Reserve Bank of St. Louis Review article by Leonall Andersen and Jerry Jordan — later known as the "St.

George J. Bratsiotis · Kasun D. Pathirage

This paper introduces a four-agent estimated New Keynesian DSGE model—comprising banked simple households, underbanked simple households, firm owners, and bank owners—to examine agent-specific and …

Greg Kaplan · Benjamin Moll · Giovanni L. Violante

This paper builds a two-asset Heterogeneous Agent New Keynesian (HANK) model matching the empirical joint distribution of income, liquid, and illiquid wealth, and finds that the indirect effect of an …

Ben S. Bernanke · Vincent R. Reinhart · Brian P. Sack

This 2004 Brookings Papers on Economic Activity paper by Ben Bernanke, Vincent Reinhart, and Brian Sack asks whether "nonstandard" monetary policies can still work once the short-term policy rate is …

Frédéric Boissay · Fabrice Collard · Jordi Galí · Cristina Manea

This paper asks whether a central bank should deviate from strict inflation targeting (SIT) to promote financial stability, studying the question in a textbook New Keynesian model augmented with …

Jordi Galí · Tommaso Monacelli

This paper builds a tractable small open economy version of the Calvo sticky-price New Keynesian model, shows its equilibrium reduces to a two-equation system in domestic inflation and the output gap …

Florin O. Bilbiie

THANK, a tractable heterogeneous-agent New Keynesian model built around a single statistic for the cyclicality of income inequality, shows that the conditions needed for HANK-style amplification of …

Xing Guo · Pablo Ottonello · Diego J. Perez

This paper builds an open-economy heterogeneous-agent New Keynesian (HANK) model in which households differ not only in income and wealth but in their real integration (tradable vs. nontradable …

Sandra Daudignon · Oreste Tristani

This paper analyzes how monetary policy should respond to a long-run natural interest rate that can drift permanently — following a bounded random walk with upper bound 3 percent and lower bound 0 …

Adrien Auclert

This paper shows that monetary policy affects aggregate consumption not only through the standard income and substitution channels but also through three redistribution channels -- earnings …

Michael Woodford

Against fears that electronic money will erode central banks' monopoly over a monetary base and so undermine their power to control inflation, Woodford argues that monetary policy works through …

William Poole

This 1988 Journal of Economic Perspectives paper by William Poole is a survey and analytical essay -- not a structural estimation exercise with a formal identification strategy -- that draws lessons …

S. Mahdi Barakchian · Christopher Crowe

This 2013 Journal of Monetary Economics paper by S. Mahdi Barakchian and Christopher Crowe argues that the standard toolkit for identifying monetary policy shocks -- recursive VARs …

Richard Clarida · Jordi Galí · Mark Gertler

Estimating a forward-looking Federal Reserve policy rule separately for 1960-79 and 1979-96, this paper finds that the Fed let real short-term rates fall as expected inflation rose before Volcker, but …

Athanasios Orphanides

This 2001 American Economic Review paper by Athanasios Orphanides asks how large the informational problem is when Taylor-type interest rate rules are implemented with the data actually available to …

Athanasios Orphanides

Re-estimating the Clarida-Galí-Gertler forward-looking Fed policy rule using only the real-time Greenbook forecasts available to the FOMC at the time, rather than revised after-the-fact data, this …

Lawrence J. Christiano · Martin Eichenbaum · Charles L. Evans

This chapter in the 1999 Handbook of Macroeconomics (Volume 1) by Lawrence Christiano, Martin Eichenbaum, and Charles Evans surveys and unifies the VAR-based literature on identifying monetary policy …

Kenneth N. Kuttner

This 2001 Journal of Monetary Economics paper by Kenneth N. Kuttner addresses a basic errors-in-variables problem in earlier event studies of monetary policy and interest rates (notably Cook and Hahn …

Mark Gertler · Peter Karadi

This 2015 American Economic Journal: Macroeconomics paper by Mark Gertler and Peter Karadi uses a "proxy SVAR" — a structural VAR identified with external instruments rather than timing restrictions — …

Luis G. Hernández-Román

This paper employs a proxy structural VAR model to examine the effects of global supply chain (GSC) shocks on U.S. macroeconomic variables and the Federal Reserve's historical response, and evaluates …

Mark Gertler · Simon Gilchrist

This 1994 Quarterly Journal of Economics paper by Mark Gertler and Simon Gilchrist asks whether small manufacturing firms bear a disproportionate share of the manufacturing decline that follows …

Michael T. Kiley

This paper examines optimal monetary policy under discretion when the loss function is asymmetric — placing greater weight on employment shortfalls than on equivalently sized employment strength. The …

Zhengyang Chen · Victor J. Valcarcel

This 2021 Journal of Economic Dynamics and Control paper by Zhengyang Chen and Victor Valcarcel shows that the Wu-Xia (2016) shadow federal funds rate — a standard modern-sample proxy for the stance …

Sebastian Schmidt

The paper builds a discrete-time DSGE model with Calvo sticky prices in which the public sector has two feedback rules that can hit corners, generating endogenous shifts between an "orthodox" regime …

Camelia Minoiu · Rebecca Zarutskie · Andrei Zlate

Minoiu, Zarutskie, and Zlate ask whether participation in the Main Street Lending Program (MSLP)—a Federal Reserve emergency facility launched in mid-2020 to channel credit to small and mid-sized …

Adrien Auclert · Bence Bardóczy · Matthew Rognlie

This paper shows that New Keynesian models with frictionless labor supply cannot simultaneously match three well-established empirical facts -- high marginal propensities to consume, low marginal …

Thomas Winberry · Adrien Auclert · Matthew Rognlie · Ludwig Straub

Winberry, Auclert, Rognlie, and Straub extend the Heterogeneous-Agent New Keynesian framework from households to firms, building a canonical heterogeneous-firm model with financial frictions in which …

V. V. Chari · Patrick J. Kehoe · Ellen R. McGrattan

This 2009 American Economic Journal: Macroeconomics paper by V. V.

Robert E. Lucas, Jr.

Lucas's 1995 Nobel Prize lecture asks why changes in the quantity of money seem, from David Hume onward, to be both neutral "units changes" in the long run and yet a source of real stimulus or …

Lawrence J. Christiano · Martin Eichenbaum · Charles L. Evans

This 2005 Journal of Political Economy paper by Christiano, Eichenbaum, and Evans (CEE) builds and estimates a general-equilibrium model to answer a specific question: what combination of frictions …

Lawrence J. Christiano · Martin S. Eichenbaum · Mathias Trabandt

This 2018 Journal of Economic Perspectives essay by Lawrence Christiano, Martin Eichenbaum, and Mathias Trabandt is a perspective/survey defense of dynamic stochastic general equilibrium (DSGE) …

Apostolos Serletis · Libo Xu

Measuring the welfare cost of inflation requires specifying a money demand function, a definition of money, and an approach to consumer surplus; existing estimates vary widely because these choices …

Stephanie Schmitt-Grohé · Martín Uribe

Studying optimal Ramsey fiscal and monetary policy in a sticky-price production economy where the government can tax only distortingly and can issue only nominal, non-state-contingent bonds, …

Sushant Acharya · Edouard Challe · Keshav Dogra

An analytically tractable heterogeneous-agent New Keynesian (HANK) model in which a utilitarian planner's optimal monetary policy departs from the representative-agent benchmark because interest rates …

Eduardo Dávila · Andreas Schaab

This paper characterizes optimal monetary policy in a heterogeneous-agent New Keynesian (HANK) model with wage rigidity, showing that a discretionary utilitarian planner's desire to redistribute …

Christopher J. Erceg · Dale W. Henderson · Andrew T. Levin

In an optimizing-agent model where both wages and prices are set in staggered Calvo contracts, monetary policy cannot reach the allocation that would prevail under fully flexible wages and prices, …

Christopher Gust · Edward Herbst · David López-Salido

Central banks must set policy under uncertainty about how private-sector expectations form, which changes how monetary policy transmits to output and inflation. This paper studies optimal …

Alisdair McKay · Christian K. Wolf

This paper characterizes optimal monetary and fiscal policy rules in a heterogeneous-agent New Keynesian (HANK) model and finds that a "dual mandate" central bank's optimal targeting rule is identical …

Richard Dennis · Tatiana Kirsanova

Dennis and Kirsanova ask whether shocks to labor-market matching efficiency and worker bargaining power pose a significant problem for monetary policy, and whether the inability to commit (discretion …

Michael Woodford

Woodford shows that the price level remains determinate even under two forms of radical money-supply endogeneity long thought to destroy monetary control -- a central-bank interest-rate peg and …

Markus Haavio · Joni Heikkinen · Pirkka Jalasjoki · Juha Kilponen · Maritta Paloviita · Ilona Vänni

This paper estimates the European Central Bank's loss function directly rather than inferring it from a reaction function, using the tone of the Governing Council's press conference introductory …

Olivier Blanchard · Jordi Galí

The standard New Keynesian model implies that stabilising inflation also stabilises the welfare-relevant output gap -- a property the authors name the "divine coincidence" and trace to the absence of …

Ojasvita Bahl · Chetan Ghate · Debdulal Mallick

Governments in emerging market and developing economies (EMDEs) routinely intervene in agricultural markets — procuring grain and redistributing it to poor households — in response to food price …

Sebastian Di Tella

This paper builds a flexible-price model in which money's liquidity premium keeps real interest rates from falling when idiosyncratic risk rises, so money reduces investment rather than stabilizing …

Tom D. Holden

The paper proposes and analyzes real rate rules — monetary policy rules of the form i_t = r_t + φπ_t (φ > 1), where r_t is the current-period real interest rate observed via TIPS yields or inflation …

Jeffery D. Amato · Thomas Laubach

Letting a fraction of consumers and price setters replace optimisation with a backward-looking rule of thumb adds endogenous persistence to output and inflation, changes how shocks travel through a …

Finn E. Kydland · Edward C. Prescott

This 1977 Journal of Political Economy paper by Finn Kydland and Edward Prescott argues that optimal control theory -- the standard technique proposed for macroeconomic stabilization policy -- is not …

Robert J. Barro · David B. Gordon

This 1983 Journal of Monetary Economics paper by Robert Barro and David Gordon shows that a monetary authority acting with full discretion each period will generate more inflation on average than one …

John H. Cochrane

Surveying the evidence for monetary, technology, oil-price, and credit shocks as drivers of postwar U.S. business cycles, Cochrane finds that none of these popular observable candidates robustly …

François Le Grand · Alaïs Martin-Baillon · Xavier Ragot

Should monetary policy deviate from price stability to address redistributive concerns in an economy with heterogeneous agents? The paper jointly solves for optimal monetary and fiscal policy under …

James Bullard · Alex Grimaud · Isabelle Salle · Gauthier Vermandel

Why did the 2021–2023 US inflation surge end in a soft landing — disinflation without a major recession — while the Volcker disinflation of 1979–1987 required substantial output losses? And was the …

Thomas J. Sargent · Neil Wallace

Sargent and Wallace show that even in a fully monetarist economy, a monetary authority that tightens money today while an independent fiscal authority's deficits are taken as given must finance the …

Guillermo A. Calvo

This 1983 Journal of Monetary Economics paper by Guillermo Calvo builds a model of staggered price-setting that is more analytically tractable than the earlier discrete-contract-length models of …

V. V. Chari · Patrick J. Kehoe · Ellen R. McGrattan

Staggered price-setting was long hoped to turn a short spell of exogenous price stickiness into a long spell of endogenous stickiness, and so into persistent output movements after a monetary shock. …

John W. Keating

This 1992 Federal Reserve Bank of St. Louis Review paper (a policy review, not peer-reviewed) by John W.

Frederic S. Mishkin

This 1995 Journal of Economic Perspectives paper by Frederic Mishkin is the introduction to a JEP symposium on the monetary transmission mechanism, and it contains no original data or estimation of …

Anusha Chari · Karlye Dilts Stedman · Christian Lundblad

Identifying US monetary policy shocks from daily moves in five-year Treasury futures around FOMC announcements, this paper shows that during the unconventional-policy years those shocks largely …

Michael T. Belongia · Peter N. Ireland

This 2018 International Journal of Central Banking paper by Michael T. Belongia and Peter N.

Masazumi Hattori · Tomohide Mineyama · Jouchi Nakajima

The paper addresses a fundamental limitation of the standard Taylor rule as a monetary policy stance gauge: the rule is defined solely for the overnight federal funds rate (FFR) and cannot assess …

Lucas Hafemann · Peter Tillmann

This 2020 International Journal of Central Banking paper by Lucas Hafemann and Peter Tillmann studies how ECB monetary policy transmits to the euro area as a whole and, separately, across individual …

Michael T. Belongia · Peter N. Ireland

This 2014 Journal of Econometrics paper by Michael Belongia and Peter Ireland asks whether Barnett's (1980) decades-old critique of simple-sum monetary aggregation -- that adding up the nominal values …

Vasco Cúrdia · Michael Woodford

Extending a New Keynesian model to give the central bank's balance sheet a genuine role in equilibrium determination, the authors distinguish three independent dimensions of monetary policy -- the …

Thomas J. Sargent · Ulf Söderström

Summarizing Sargent's "The Conquest of American Inflation," this essay compares the popular rational-expectations "triumph of natural-rate theory" account of the rise and fall of U.S. inflation …

Ulf Söderström · Anders Vredin

Introducing Thomas Sargent's monograph "The Conquest of American Inflation" to a central-bank audience, this short essay contrasts the two standard accounts of the postwar rise and fall of inflation …

Marvin J. Barth III · Valerie A. Ramey

This 2001 NBER Macroeconomics Annual paper by Marvin Barth and Valerie Ramey tests whether monetary policy operates through a supply-side "cost channel" -- in which a monetary contraction raises …

Xiaoming Li · Zheng Liu · Yuchao Peng · Zhiwei Xu

This paper asks how changes in the composition (not the size) of Chinese local government debt influence bank risk-taking, credit allocation between privately owned enterprises (POEs) and state-owned …

David B. Gordon · Eric M. Leeper

This 1994 Journal of Political Economy paper by David B. Gordon and Eric M.

Arvind Krishnamurthy · Annette Vissing-Jorgensen

This 2011 Brookings Papers on Economic Activity paper by Arvind Krishnamurthy and Annette Vissing-Jorgensen evaluates the effect of the Federal Reserve's large-scale purchases of long-term Treasuries …

John H. Cochrane · Monika Piazzesi

This 2002 American Economic Review Papers and Proceedings essay by John Cochrane and Monika Piazzesi proposes a high-frequency alternative to monthly-VAR identification of monetary policy shocks, …

Stefania D'Amico · William English · David López-Salido · Edward Nelson

This 2012 Economic Journal paper estimates how the Federal Reserve's large-scale asset purchase programmes of 2008-2011 lowered longer-term US Treasury yields, disaggregating the total effect within a …

Joseph Gagnon · Matthew Raskin · Julie Remache · Brian Sack

This 2011 International Journal of Central Banking paper by Gagnon, Raskin, Remache, and Sack provides the founding empirical assessment of the Federal Reserve's first large-scale asset purchase …

A. Lee Smith · Victor J. Valcarcel

This 2023 Journal of Economic Dynamics and Control paper by A. Lee Smith and Victor J.

Edward Nelson

This 2003 Journal of Monetary Economics paper by Edward Nelson (Bank of England) asks whether the New Keynesian models that had displaced money-focused monetarist analysis by the early 2000s still …

Maurizio Michael Habib · Fabrizio Venditti

Decomposing a global risk factor built from stock returns in 63 economies into structural shocks, this paper finds that exogenous shifts in the financial sector's risk-bearing capacity matter more …

N. Gregory Mankiw

The consensus view that contractionary monetary shocks raise unemployment but only slowly and gradually lower inflation is, this lecture argues, flatly inconsistent with the forward-looking "new …

Bernardo Morais · José-Luis Peydró · Jessica Roldán-Peña · Claudia Ruiz-Ortega

Using the universe of business loans in Mexico matched to firm and bank balance sheets, this paper shows that each foreign monetary policy moves local credit supply mainly through banks headquartered …

Milton Friedman

This 1961 Journal of Political Economy paper is Milton Friedman's reply to J. M.

S. Borağan Aruoba · Thomas Drechsel

This 2024 Journal of Monetary Economics paper by S. Borağan Aruoba and Thomas Drechsel asks why the aggregate U.S.

John B. Taylor

This 1995 Journal of Economic Perspectives paper by John B. Taylor lays out an empirical framework for the monetary transmission mechanism and asks what it implies for the choice between fixed and …

Kenneth N. Kuttner · Patricia C. Mosser

This 2002 FRBNY Economic Policy Review article by Kenneth Kuttner and Patricia Mosser is a conference overview, not an original empirical study: it synthesizes papers presented at the Federal Reserve …

Robert G. King

King gives a simple exposition of the "New IS-LM model" -- a three-equation system of a forward-looking IS curve, a Fisher equation, and a New Keynesian (expectational) Phillips curve, each derivable …

Olivier Coibion · Yuriy Gorodnichenko · Johannes Wieland

This 2012 Review of Economic Studies paper by Olivier Coibion, Yuriy Gorodnichenko, and Johannes Wieland asks what rate of steady-state (trend) inflation maximizes welfare in a New Keynesian DSGE …

Marvin Goodfriend

Dividing 1987-2001 into six phases -- the post-crash inflation of 1987-90, the Gulf War disinflation, the celebrated 1994-95 preemptive tightening, the near-full-credibility long boom, the 1999-2000 …

Selva Demiralp · Òscar Jordà

Demiralp and Jorda argue that since the Fed began publicly announcing its Federal funds rate target in 1994, it has manipulated short-term rates through a Pavlovian "announcement effect" -- moral …

John H. Cochrane

Using band-pass spectral filters on weekly U.S. data from the Federal Reserve's 1979-82 nonborrowed-reserve-targeting period, Cochrane finds a negative short-run correlation between money growth and …

Milton Friedman

Delivered as Friedman's presidential address to the American Economic Association in December 1967, this paper argues that two decades of professional opinion had swung too far toward assigning …

C. Bora Durdu · Alex Martin · Ilknur Zer

US monetary tightening raises the probability of a banking crisis abroad, but only where the exposure to the United States is direct -- heavy bilateral trade or large dollar-denominated liabilities. …

Richard Clarida · Jordi Galí · Mark Gertler

This widely cited survey derives monetary policy design from a simple forward-looking New Keynesian model, showing that optimal policy without commitment requires raising the nominal rate more than …

Jonas E. Arias · Dario Caldara · Juan F. Rubio-Ramírez

This 2019 Journal of Monetary Economics paper by Jonas Arias, Dario Caldara, and Juan Rubio-Ramírez proposes identifying monetary policy shocks in a structural VAR by placing sign and zero …

Michael Woodford

Evaluating Taylor's interest-rate rule against an explicit optimizing New Keynesian model, this paper coins the "Taylor principle" -- that the nominal rate must eventually rise by more than any …

Gauti B. Eggertsson · Michael Woodford

This 2003 Brookings Papers on Economic Activity article by Gauti Eggertsson and Michael Woodford builds a fully dynamic New Keynesian general-equilibrium model — Calvo (1983) staggered pricing, money …

Giorgio E. Primiceri

This 2005 Review of Economic Studies paper by Giorgio Primiceri develops a Bayesian time-varying-parameter structural VAR (TVP-SVAR) with stochastic volatility — allowing not just the VAR coefficients …

Urban Jermann · Haotian Xiang

The rapid proliferation of cryptocurrency tokens—roughly 10,000 outstanding with a total market capitalization around $3 trillion as of early 2024—raises new questions about the design of token …

Ralph Luetticke

In a two-asset HANK model where households hold liquid bonds and illiquid capital, monetary policy transmits mainly through investment rather than consumption, but a tightening redistributes income …

Timothy Cogley · Argia M. Sbordone

This 2008 American Economic Review paper by Timothy Cogley and Argia Sbordone asks whether the substantial persistence long observed in U.S. inflation reflects a genuine structural feature of …

Karlye Dilts Stedman · Andrew Hanson

The paper asks why unconventional monetary policy (UMP) spillovers from the European Central Bank (ECB) to the U.S. Treasury yield curve vary so substantially over time, and whether the time-varying …

Sushant Acharya · Keshav Dogra

Using an analytically tractable heterogeneous-agent New Keynesian model with CARA preferences and normally distributed idiosyncratic income risk, the paper shows that whether incomplete markets …

Nathan S. Balke · Kenneth M. Emery

This 1994 Federal Reserve Bank of Dallas Economic Review paper by Nathan S. Balke and Kenneth M.

Stephen G. Cecchetti · Tommaso Mancini-Griffoli · Machiko Narita · Ratna Sahay

Across nearly 1,000 listed financial firms in 21 countries, prolonged monetary easing raises leverage -- and for non-US firms, sustained easing in the United States raises leverage by more than easing …

Stephen D. Morris

This 2016 Economics Letters paper by Stephen D. Morris asks how concise the VARMA (vector autoregressive moving-average) representation of a DSGE model can be made, and whether the model's structural …

Harald Uhlig

This 2005 Journal of Monetary Economics paper by Harald Uhlig proposes an "agnostic" sign-restriction procedure for identifying monetary policy shocks in a VAR, designed to test rather than assume the …

John H. Cochrane

Even after monetary policy shocks are "correctly" identified in a VAR, Cochrane argues a further, purely theoretical identifying assumption -- whether anticipated money can affect output -- is needed …

Eric M. Leeper · Christopher A. Sims · Tao Zha

This 1996 Brookings Papers on Economic Activity paper by Eric Leeper, Christopher Sims, and Tao Zha asks what monetary policy actually does, and argues that the answer the identified-VAR literature …

Adrien Auclert · Matthew Rognlie · Ludwig Straub · Tomáš Ťapák

Most heterogeneous-agent New Keynesian (HANK) models take household portfolios as exogenously fixed. This paper develops a sequence-space method for solving instead for endogenous, risk-hedging …

Lawrence Christiano · Martin Eichenbaum · Sergio Rebelo

The government-spending multiplier can be much larger than one when the zero lower bound on the nominal interest rate binds, and the larger the fraction of the spending that occurs while the nominal …

Olivier Coibion · Yuriy Gorodnichenko

This 2012 American Economic Journal: Macroeconomics paper by Olivier Coibion and Yuriy Gorodnichenko adjudicates between two observationally similar explanations for the federal funds rate target's …