Resolving the Paradox with Reputation notes
Time Consistency, II: Resolving the Paradox with Reputation
A.
Much of the paradox of time consistency goes away once
one realizes that central banks and the public have repeated
interaction with each other.
B.
Political Business Cycles notes
Political Business Cycles
A.
Traditional approach: If monetary policy can affect output and
employment in the short-run, then policy-makers will use this
power to smooth fluctuations and compensate for shocks
unanticipated
Optimal Rate of Inflation notes
Optimal Monetary Policy, II: The Optimal Rate of Inflation
A.
If monetary policy will not change average unemployment
level, then deadweight macro losses are a function of
unemployment volatility, inflation, and inflation v
Hyperinflation and Monetarist Arithmetic notes
Seigniorage, II: Hyperinflation and Expectations
A.
Note: A 1-shot increase in the money supply
collectsseigniorage without increasing the inflation tax. It's like
a lump-sum tax.
B.
The lower people expect t
Optimal Policy notes
Optimal Policy
A.
First part of the course: main positive theories of the
economy.
B.
Second part: implications for optimal (aka Kaldor-Hicks
efficient) policy.
1.
Note: Efficiency isn't everything; but as long as it
counts at all, it
The Case for Zero Inflation Deflation and Moderate Inflation notes
The Case for Zero Inflation, Deflation, and Moderate Inflation
A.
Why zero?
B.
Reduces inflation tax, but does not eliminate (unless nominal
rates fall to 0 too).
C.
Substantial reduction
Time Consistency Independence and Compensation notes
Time Consistency, Independence, and Compensation
A.
What is the advantage of CB independence? Rogoff's paper
notes that central bankers are normally selected from the
"conservative" elements of society.
Time Consistency notes
Time Consistency, I: The Paradox of Discretion
A.
While the PC approach to macro policy has had limited
influence, a different approach with a similar flavor has been
more influential. Time consistency literature treats policymakers
Optimal Monetary Policy Targeting notes
Optimal Monetary Policy, I: What to Target
A.
Post-RE, it is generally recognized that in the long-run
money only changes nominal variables. The CB may matter for
real variables in the short-run, but extended effort
Microanalytics notes
Seigniorage, I: Microanalytics
A.
Traditional approach: outside forces somehow makemoney
growth high. Or high money growthis necessary for high
employment. Orhigh rate of price growth forces policy-makers
to accommodate with high rate