The indeterminacy of prices under interest rate pegging: the non-Ricardian case

Article Abstract:

A study has been conducted to investigate interest rate pegging in the context of a discrete time, monetary version of the Blanchard finite horizons model. In this model, agents constantly face the probability of death in each period, which is mu. The Blanchard model provides a rigorous framework for treating government bonds as net wealth and treating departures from Ricardian equivalence in an optimizing framework. Pure interest rate pegging has been found to generate a multiplicity of equilibrium price sequences with a continuum of equilibrium price levels.

Inflation (Finance), Interest rates, Monetary policy, Inflation (Economics)

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Does detrending matter for the determination of the reference cycle and the selection of turning points?

Article Abstract:

A study was conducted to analyze the sensitivity of turning points categorization to detrending and examine implied cycles against those determined by business cycle researchers from the NBER and Dept of Commerce. Two dating rules were examined. Results indicated the sensitivity of the dating of turning points with detrending and dating rules. Findings also showed differences in the amplitude and duration characteristics of growth cycles produced with alternative detrending techniques.

Business, Analysis, Business cycles, Business forecasting

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Price smoothing policies: a welfare analysis

Article Abstract:

A welfare analysis of price and interest rate smoothing policies is presented. The analysis follows earlier studies which have attempted to remove seasonal variations involving prices and nominal interest rates and applies a money-in-the-utility-function model. Results show that smoothing promotes welfare. However, these policies are non-optimal and depend on shock origin forformulation.

Welfare economics

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