Differences in Interest Rate Policy at the ECB and the Fed: An Investigation with a Medium‐Scale DSGE Model

Sahuc, Jean‐Guillaume; Smets, Frank

doi:10.1111/j.1538-4616.2008.00124.x

Cited by 58 publications

(59 citation statements)

References 6 publications

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“…This is due to the fact that by smoothing the interest rate, the monetary authority is much more accommodative and therefore its stabilizing effect is lower. This last result seems to be of particular interest since, as documented by many empirical papers (among others Sahuc andSmets 2008, Smets andWouters 2003) both the FED and the ECB seem to adopt Taylor rule with very high degree of smoothing-approximately equal to 0.8, as in our benchmark calibration.…”

Section: Price and Wage Rigidities Nominal Volatility And Growthmentioning

confidence: 87%

Endogenous Growth, Monetary Shocks and Nominal Rigidities

2011

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We introduce endogenous growth in an otherwise standard NK model with staggered prices and wages. Some results follow: (i) monetary volatility negatively affects long-run growth; (ii) the relation between nominal volatility and growth depends on the persistence of the nominal shocks and on the Taylor rule considered; (iii) a Taylor rule with smoothing increases the negative effect of nominal volatility on mean growth.

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Section: Price and Wage Rigidities Nominal Volatility And Growthmentioning

confidence: 87%

Endogenous Growth, Monetary Shocks and Nominal Rigidities

2011

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“…Although the two organizations serve similar roles in their respective economies, one study suggests that the ECB has moved its policy rate much less frequently than the Fed and that their interest rate behavior was rather different [46]. However, both organizations have had to face the effects of the recent financial crisis.…”

Section: Introductionmentioning

confidence: 99%

Mapping discursive dynamics of the financial crisis: a structural perspective of concept roles in semantic networks

Nerghes¹,

Lee

Groenewegen³

et al. 2015

Compu Social Networks

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Background/purpose: Convenient access to vast and untapped collections of documents generated by organizations is a highly valuable resource for research. These documents (e.g., press releases) are a window into organizational strategies, communication patterns, and organizational behavior. However, the analysis of large document corpora requires appropriate automated methods for text mining and analysis that are able to take into account the redundant and predictable nature of formalized discourse. Methods: We use a combination of semantic network analysis and network centrality measures to overcome these particular challenges and to explore the dynamic structural space of concepts in formalized documents pertaining to the recent financial crisis. Data: For our analyses, we collect the press releases of the European Central Bank (ECB) and the United States' Federal Reserve System (Fed) issued between 2006 and 2013 in order to examine their semantic networks before, during, and after the recent financial crisis. Their press releases are notably impactful in their influence on other financial institutions and society at large, especially during times of financial volatility. Results: The structural space created from joint centrality metrics reveals salient shifts in the discursive practices of the ECB and Fed. In particular, the Fed exhibits greater attentiveness to the financial crisis especially during the crisis itself, while the ECB's attention is delayed and increasing steadily. Furthermore, we show both the Fed's and the ECB's discourse transitioning into a new "hybrid" state, rather than returning to the pre-crisis status quo. Conclusions: Examining the semantic networks of organizational text documents, we find that our analytic approach reveals important discursive shifts, which would not have been discovered under traditional text-analytic approaches. We demonstrate the utility of this approach in investigating large text corpora of organizational discourse, and we anticipate our methods to be comparably valuable in the analysis of a large spectrum of formal and informal discourse.

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“…The wage rigidity parameter ξ varies between 0.50 and 0.90 on a quarterly basis, comprising the estimates of Sahuc and Smets (2007) and Smets and Wouters (2005) for the euro area and for the U.S. economy, and adjustments costs φ between 0.0 and 0.2, which is in the order of magnitude of the estimates of Hall (2004) for U.S. industries. The parameter values β=0.99, ε=6, η=6, κ=1 and φ=2.88 and the labour supply shock μ t = 0.88μ t-1 +ν t on κ with the innovation ν of 0.42 standard errors are taken from the U.S. estimates in Sahuc and Smets (2008) and Smets and Wouters (2005). Figure 1 illustrates the welfare consequences of nominal and real labour market rigidities for the labour supply shock.…”

Section: Interaction Between Nominal and Real Labour Market Rigiditiesmentioning

confidence: 99%

Interacting nominal and real labour market rigidities

Vogel

2011

Economics Letters

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This note investigates the interaction between nominal and real labour market rigidities. It shows nominal wage rigidity to have little effect on the welfare loss from labour adjustment costs under a labour supply shock. This implies that the second best effect of nominal price stickiness under real wage persistence studied in Duval and Vogel (2007) does not apply to the propagation of supply shocks under nominal wage rigidity and labour adjustment costs.JEL classification: E24, E32, J23, J30

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Differences in Interest Rate Policy at the ECB and the Fed: An Investigation with a Medium‐Scale DSGE Model

Cited by 58 publications

References 6 publications

Endogenous Growth, Monetary Shocks and Nominal Rigidities

Endogenous Growth, Monetary Shocks and Nominal Rigidities

Mapping discursive dynamics of the financial crisis: a structural perspective of concept roles in semantic networks

Interacting nominal and real labour market rigidities

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