FEDERAL RESERVE BANK OF SAN FRANCISCO
WORKING PAPER SERIES
Measuring the Effect of the Zero Lower Bound
on Medium- and Longer-Term Interest Rates
Eric T. Swanson
Federal Reserve Bank of San Francisco
228
Solutions to Chapter 10
(i) L ^ ^ y - y * )
2
'
or simply
E
2
V-y)T
a
2
V
4(y*-y)
2
'
+^y*-y) ,
2a
2
2
V
2
( 2) L ^ 4 ( y * - y ) l A
2
2
|_
a
Output equals y i n e quilibrium, regardless o f the
S OLUTIONS T O C HAPTER 11
P roblem 11.1
(a) ( i) T aking the time derivative of d (t) = D (t)/Y(t) gives us
D(t)Y(t)-D(t)Y(t)
(1) d (t) = Y(ty
Substituting D (t) = 5 (t) - the rate o f change o f the
No-Arbitrage Taylor Rules with Switching Regimes
Haitao Li , Tao Li , and Cindy Yu
June 2011
ABSTRACT
We develop a continuous-time regime-switching model for the term structure of interest rates,
in w
Journal of Economic PerspectivesVolume 17, Number 4 Fall 2003Pages 99 118
The Mirage of Exchange Rate Regimes
for Emerging Market Countries
Guillermo A. Calvo and Frederic S. Mishkin
I
n recent years,
NBER WORKING PAPER SERIES
MEASURING THE OUTPUT RESPONSES TO FISCAL POLICY
Alan J. Auerbach
Yuriy Gorodnichenko
Working Paper 16311
http:/www.nber.org/papers/w16311
NATIONAL BUREAU OF ECONOMIC RESEARCH
J ournal of Economic Literature
Vol. XXXVII ( December 1999 ), p p. 16611707
Clarida, Gal, Gertler: The Science of Monetary Policy
The Science of Monetary Policy:
A New Keynesian Perspective
Richard C
NBER WORKING PAPER SERIES
FROM FINANCIAL CRASH TO DEBT CRISIS
Carmen M. Reinhart
Kenneth S. Rogoff
Working Paper 15795
http:/www.nber.org/papers/w15795
NATIONAL BUREAU OF ECONOMIC RESEARCH
1050 Massac
248
Solutions to Chapter 11
The case in which a is sufficiently small that d is negative for some values o f d is depicted on the lefthand side. In this case, d] is a stable equilibrium whereas d is n
256
Solutions to Chapter 11
( d) Since all voters prefer D = 0, so does the median voter and thus the policymaker w ill pursue a
balanced budget p olicy and not issue any debt.
(e) A balanced-budget r
2 60
Solutions to Chapter 1 1
The increase in B causes the probability o f reform to fall.
I f initially V '(X) at X = A was negative and the rise in B is small enough, it will continue to be negative
Solutions to Chapter 10
239
policymaker. Thus both policymakers have the same choice set. The "a" policymaker makes her choice
to maximize true social welfare, whereas the " a' " policymaker makes her
262
Solutions to Chapter 11
[ B - ( X * - C ) ] [ ( W - T ) + X *]
B-(X*-C)
-+ 1
(-C),
B-A
B-A
w hich can be rewritten as
n W Y
[B-(X*-C)](W-T) [B-(X*-C)]X*
[A-(X*-C)]C
(V) V (X*) =
;
+
;
+
B-A
B-A
B
Solutions to Chapter 11
261
As in the model in the text, there are two possibilities. First, the workers may choose a value of X in the
interior o f [A + C , B + C] so that the probability o f the cap
1
/
1
The CAPM : M ostl y Cook bo ok W it h Expl anat i ons
(Welch,Chapter09)
IvoWelch
UCLA Anderson School, Finance 408
January1,2012
Did you bring your calculator? Did you read the chapter ahead of
Chapter 24
I N F L A T I O N STABILIZATION A N D B O P C R I S E S IN
DEVELOPING
COUNTRIES
*
G UILLERMO A . CALVO
University of Maryland
CARLOS A . VEGH*
UCLA
C ontents
A bstract
Keywords
1. Introduct
Solutions to Chapter 11
257
since U ' () > 0 and U "() < 0. Thus a fall in n increases D . Thus the policymaker issues more debt
and increases purchases i n period two after the news that it is less l
23 8
Solutions to Chapter 10
(11) o - ^ E t y ] - ^ ,
and
(12) Etf] = a +y .
Substituting equations (11) and (12) into equation (8) gives us the following expected value o f the true
social welfare fu
254
Solutions to Chapter 11
Problem 11.7
Since the real interest rate is assumed to be zero, the period-1 policymaker has no interest payments on
the initial debt, D 0 . Thus the period-l budget const
For release on delivery
9:30 a.m. EDT (8:30 a.m. CDT)
May 10, 2013
Monitoring the Financial System
Remarks by
Ben S. Bernanke
Chairman
Board of Governors of the Federal Reserve System
at the
49th Annu
250
Solutions to Chapter 11
Problem 11.3
I n the Barro tax-smoothing model in which output and the real interest rate are constant, the government
finds i t optimal to set taxes equal to a constant su
Solutions to Chapter 11
255
period-1 policymaker therefore has an incentive to reduce resources available in the second period by
transferring resources from the second period to the first period by b
Solutions to Chapter 10
237
public's estimate of n . Equation (18) says that i f the variance of the policymaker's taste for inflation,
CT , is very large relative to the variance of the random shocks
Solutions t o Chapter 10
i
i?i
(19) c o v [ ( i cfw_ , - i J X ( i f - i ! ) ] = c o v [ k ( k - l ) A m + k E
+
t
227
k(k-l)Am,
t+]
,
L
Since 8 is white noise and v ar(Am,) = <r , we have
E2
,
i
2
l
Appropriate Growth Policy: A Unifying Framework
Philippe Aghion
Peter Howitt
Harvard University
Brown University
[email protected][email protected]
December 8, 2005
JEL codes: O20, O30, O4