Inflation and Output in New Keynesian Models with a Transient Interest Rate Peg

By Charles T. Carlstrom, T. Fuerst, Matthias Paustian. 2012

193 citations recorded by the source corpus.

View Paper: https://www.semanticscholar.org/paper/a58c8b3873ab6556f12424fecc68e5ec0d614579

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In Economics and Econometrics

Citations in the corpus

The Safety Trap (2017, background): “which amplifies the effect of the initial reduction θdV S in aggregate demand to a final effect of d (ξX) = ξX θV S θdV —a proportional increase in output.(15,16) Figure 2 provides a graphical illustration of this adjustment.”
The Discounted Euler Equation: A Note (2016, background): “…highlighted that standard monetary business cycle models imply that far future forward guidance has implausibly large effects on current outcomes (Carlstrom et al. 2015; Del Negro et al. 2015).1 In earlier research, we showed that this implausible behaviour of standard models results from the…”
Geographic Cross-Sectional Fiscal Spending Multipliers: What Have We Learned? (2019, background): “(12)A recent literature has questioned the plausibility of some of the forward-looking elements of the New Keynesian model which give rise to potentially very large closed economy multipliers when monetary policy does not react (Carlstrom et al., 2015; Del Negro et al., 2015; McKay et al., 2016; Kap”
High Frequency Identification of Monetary Non-Neutrality: The Information Effect (2018, unknown): “Recent work has shown that standard New Keynesian models such as the one we are using are very sensitive to interest rate movements in the far future (Carlstrom, Fuerst, and Paustian 2015; Mckay, Nakamura, and Steinsson 2016).”
Forward Guidance and Macroeconomic Outcomes since the Financial Crisis (2016, methodology): “We employ an enhanced version of the canonical medium- scale NK model pioneered by Christiano et al. (2005) and Smets and Wouters (2007).”
On DSGE Models (2018, unknown): “Carlstrom et al. (2015) and Kiley (2016) show that the magnitude of the forward guidance puzzle is substantially reduced in a sticky information (as opposed to a sticky price) model.”
The New-Keynesian Liquidity Trap (2017, background): “Christiano, Eichenbaum and Rebelo (2011), Eggertsson (2011), Woodford (2011), and Carlstrom, Fuerst, and Paustian (2012) all find large fiscal multipliers, and multipliers that increase with the duration of fiscal expansion, in new-Keynesian zero-bound models.”
The State of New Keynesian Economics: A Partial Assessment (2018, background): “This forward guidance puzzle was first discussed by Carlstrom et al. (2015) and Del Negro et al. (2015).”