E61

Robert J. Barro · David B. Gordon

Barro and Gordon build a positive (not merely normative) theory of monetary policy in a natural-rate model, aiming to reconcile two stylized facts -- inflation and money growth that are persistently …

Sang Rae Kim

This paper studies when a bank is more effective as a supplier of privately produced money-like safe assets (repo, commercial paper), finding that a bank produces safer, more liquid assets when (1) …

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 …

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 …

Stefania Albanesi · V. V. Chari · Lawrence J. Christiano

Embedding the Kydland-Prescott/Barro-Gordon time-inconsistency logic into a standard sticky-price, cash-credit-goods general equilibrium model, this paper shows the model generically has either two …

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, …

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 …

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 …

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 …