The Effects of Monetary Policy: Theory with Measured Expectations - Archive ouverte HAL Access content directly
Preprints, Working Papers, ... (Working Paper) Year :

The Effects of Monetary Policy: Theory with Measured Expectations

(1) , (2, 3, 4) , (5, 6)
1
2
3
4
5
6

Abstract

We study the effects of monetary policy on aggregate consumption with a general equilibrium model but without making assumptions about expectation formation. The key idea is to express consumption of non-hand-to-mouth households as a function of expectations only and to elicit all expectations appearing in the consumption functions for alternative policy scenarios with a tailored survey. We illustrate this approach by computing aggregate consumption for alternative policies before the March 2021 and March 2022 FOMC meetings. We find that a modest forward guidance statement in the March 2021 FOMC meeting would have reduced aggregate consumption by 0.17% on impact and an interest rate hike of 50 basis points in the March 2022 FOMC meeting would have reduced aggregate consumption by 0.15% on impact.
Fichier principal
Vignette du fichier
2022_roth_wiederholt_wohlfart_the_effects_of_monetary_policy_theory_with_measured_expectations.pdf (5.3 Mo) Télécharger le fichier
Origin : Files produced by the author(s)

Dates and versions

hal-03878711 , version 1 (30-11-2022)

Licence

Attribution - NonCommercial - NoDerivatives - CC BY 4.0

Identifiers

  • HAL Id : hal-03878711 , version 1

Cite

Christopher Roth, Mirko Wiederholt, Johannes Wohlfart. The Effects of Monetary Policy: Theory with Measured Expectations. 2022. ⟨hal-03878711⟩
0 View
0 Download

Share

Gmail Facebook Twitter LinkedIn More