Arbeitspapier
Does my model predict a forward guidance puzzle?
We provide suffcient conditions for when a rational expectations structural model predicts bounded responses of endogenous variables to forward guidance announcements. The conditions coincide with a special case of the well-known (E)xpectation-stability conditions that govern when agents can learn a Rational Expectations Equilibrium. Importantly, we show that the conditions are distinct from the determinacy conditions. We show how the conditions are useful for diagnosing the features of a model that contribute to the Forward Guidance Puzzle and reveal how to construct well-behaved forward guidance predictions in standard medium-scale DSGE models.
- ISBN
-
978-952-323-294-5
- Language
-
Englisch
- Bibliographic citation
-
Series: Bank of Finland Research Discussion Papers ; No. 19/2019
- Classification
-
Wirtschaft
Price Level; Inflation; Deflation
Business Fluctuations; Cycles
Monetary Policy
Expectations; Speculations
Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- Event
-
Geistige Schöpfung
- (who)
-
Gibbs, Christopher G.
McClung, Nigel
- Event
-
Veröffentlichung
- (who)
-
Bank of Finland
- (where)
-
Helsinki
- (when)
-
2019
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Gibbs, Christopher G.
- McClung, Nigel
- Bank of Finland
Time of origin
- 2019
Other Objects (12)
The power of forward guidance and the fiscal theory of the price level
Forward guidance with unanchored expectations
Comparing inflation and price level targeting: the role of forward guidance and transparency
The forward guidance puzzle
Testing the structural interpretation of the price puzzle with a cost channel model
The age-structure–inflation puzzle
Money as an indicator variable for monetary policy when money demand is forward looking
Forecasting with a forward-looking DGE model: combining long-run views of financial markes with macro forecasting
Disciplining expectations and the forward guidance puzzle
Monetary policy, inflation expectations and the price puzzle
Targeting nominal GDP or prices: Guidance and expectation dynamics
Resolving new keynesian puzzles
The power of forward guidance and the fiscal theory of the price level
Forward guidance with unanchored expectations
Comparing inflation and price level targeting: the role of forward guidance and transparency
The forward guidance puzzle
Testing the structural interpretation of the price puzzle with a cost channel model
The age-structure–inflation puzzle
Money as an indicator variable for monetary policy when money demand is forward looking
Forecasting with a forward-looking DGE model: combining long-run views of financial markes with macro forecasting
Disciplining expectations and the forward guidance puzzle
Monetary policy, inflation expectations and the price puzzle
Targeting nominal GDP or prices: Guidance and expectation dynamics
Resolving new keynesian puzzles
The power of forward guidance and the fiscal theory of the price level
Forward guidance with unanchored expectations
Comparing inflation and price level targeting: the role of forward guidance and transparency
The forward guidance puzzle
Testing the structural interpretation of the price puzzle with a cost channel model
The age-structure–inflation puzzle
Money as an indicator variable for monetary policy when money demand is forward looking
Forecasting with a forward-looking DGE model: combining long-run views of financial markes with macro forecasting
Disciplining expectations and the forward guidance puzzle
Monetary policy, inflation expectations and the price puzzle
Targeting nominal GDP or prices: Guidance and expectation dynamics