Browsing by Subject "uskottavuus"

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  • Chen, Yu-Fu; Funke, Michael; Glanemann, Nicole (2009)
    BOFIT Discussion Papers 21/2009
    Hong Kong's currency is pegged to the US dollar in a currency board arrangement. In autumn 2003, the Hong Kong dollar appreciated from close to 7.80 per US dollar to 7.70, as investors feared that the currency board would be abandoned. In the wake of this appreciation, the monetary authorities revamped the one-sided currency board mechanism into a symmetric two-sided system with a narrow exchange rate band. This paper reviews the characteristics of the new currency board arrangement and embeds a theoretical soft edge target zone model typifying many intermediate regimes, to explain the notable achievement of speculative peace and credibility since May 2005. JEL-Classification: C61, E42, F31, F32 Keywords: currency board arrangement, target zone model, credibility, Hong Kong
  • Kortelainen, Mika (2001)
    Suomen Pankin keskustelualoitteita 3/2001
    We present a dynamic general equilibrium model with some nominal rigidities and calibrate it to euro area data.The most important features of the model include consumption/saving decisions according to Blanchard's stochastic lifetimes approach; valuation of private financial wealth according to the present value of capital income; overlapping Calvo wage contracts in the labour market; and a neoclassical supply side with Cobb-Douglas technology.The model is developed for use in analysing differences between perceived and actual monetary policy rules, which is then done as a means of evaluating the macroeconomic benefits of credibility in monetary policy.General properties of the model are analysed with a variety of simulation experiments.Key words: EDGE, rational expectation, DGE models, nominal rigidites
  • Tarkka, Juha; Kortelainen, Mika (2001)
    Bank of Finland. Bulletin 75 ; 3
  • Äimä, Kustaa (1998)
    The aim of this article is to establish the level of independence that each of the Estonian, Latvian and Lithuanian central banks enjoy according to law and in practice.The rationale behind this is the well-known both empirically and theoretically verified relationship between central bank independence (CBI) and inflation rate arising from the increased monetary policy credibility that is possible to obtain by strengthening the position of the central bank (CB).In this paper two different indices of central bank independence are used to measure the level of legal CBI of the Baltic central banks, namely Grilli - Masciandro - Tabellini (1991) and Cukierman (1992).Ex-post turnover rates of central bank governors are then calculated as an indicator of actual CBI or more precisely the lack of it. The main findings of the study are firstly the results of the indexation process.It is safe to say that the Baltic central banks have been endowned with highly independent legal positions. Furthermore, there are no truly significant variations between the three countries in this respect.Secondly, a quite different picture arises when actual CBI is studied.The calculated turnover rate of the Lithuanian CB governors is far higher than the comparabale figure for Estonia and especially Latvia.Even though the time frame used in this study is rather short for obvious reasons the Lithuanian rate has to be taken as a sign of non- satisfactory level of autonomy of the CB.Apart from measuring the level of CBI this paper concentrates on the credibility of monetary and exchange rate policies pursued in the Baltic countries in recent years.It is argued that the reasons for the lower than desired credibility of the Lithuanian monetary system compared to Latvia or Estonia are the low level of actual CBI and the political nature and instability of monetary decision making in the country. Keywords: Baltic countries, central bank independence, policy credibility
  • Hasko, Harri (2004)
    Usko euroalueen finanssipolitiikan koordinaation tehokkuuteen on heikentynyt.Sitä ovat huonontaneet EU-maiden liialliset budjettialijäämät sekä komission ja Ecofin-neuvoston kiista vakaus- ja kasvusopimuksen tulkinnasta. Komissio on ehdottanut uudistuksia syntyneen umpikujan avaamiseksi
  • Vajanne, Laura (1995)
    Pitkät korot heijastavat rahoitusmarkkinoiden luottamusta talous- ja rahapolitiikkaa kohtaan.Kun inflaatiopaineet kasvavat se johtaa väistämättä korkeisiin korkoihin.Jos matalaan inflaatioon uskottaisiin, pitkissä koroissa olisi nyt selvästi laskuvaraa.Tämä puolestaan tukisi sekä taloudellista kasvua että työllisyyttä.
  • Hämäläinen, Sirkka (1994)
    Bank of Finland. Bulletin 68 ; 11 ; November
  • Honkapohja, Seppo; Mitra, Kaushik (2020)
    Journal of Monetary Economics December
    Published also in BoF DP 5/2018
    Global learning dynamics for price-level targeting (PLT) monetary policy are analyzed and compared to inflation targeting in a nonlinear New Keynesian model. Domain of attraction of target steady state is a new robustness criterion for policy regimes. Robustness of PLT depends on whether a known target path is incorporated into learning. Credibility is measured by accuracy of this forecasting method relative to simple statistical forecasts evolving through reinforcement learning. Initial credibility and target price are key factors influencing performance. Model results are in line with the Swedish experience of price stabilization in1930’s.
  • Haavio, Markus (2008)
    Suomen Pankki. BoF online 2008/13
    Energian ja elintarvikkeiden hinnat ovat nousseet voimakkaasti viime aikoina. Öljyn ja elintarvikkeiden hintojen noustessa myös euroalueen inflaatio on kiihtynyt. Tilanne on keskuspankin kannalta hankala. Yhtäältä raaka-aineiden hinnannousu kiihdyttää inflaatiota. Toisaalta etenkin energian kallistuminen uhkaa leikata kokonaistuotantoa ja ajaa talouden taantumaan. Tässä julkaisussa pohditaan taloustieteelliseen kirjallisuuteen tukeutuen, miten rahapolitiikan pitäisi reagoida öljyn ja elintarvikkeiden hintojen nousuun.
  • Ollus, Simon-Erik; Simola, Heli (2007)
    BOFIT Online 1/2007
    Russian authorities give two official figures for imports of goods to Russia.Russian Customs registers values stated in customs declarations, while the Central Bank of Russia adds in its estimate of grey imports to obtain an overall import figure.Using mirror statistics of Russia s main trading partners, we suggest that grey imports are in fact higher than the CBR estimate.Hence, official statements of trade and current account surpluses should be reduced to better reflect Russia s actual external balance.This would also imply less capital outflow from Russia than suggested by current estimates. Keywords: Russia, foreign trade, imports, grey schemes, external balance
  • Mattila, Veli-Matti (1998)
    Suomen Pankin keskustelualoitteita 24/1998
    In this paper we analyse the macroeconomic effects of peso problems by simulating numerically a small-scale rational expectations macromodel.The model is a conventional IS-LM-AS model of an open economy under floating exchange rates.The peso problem has been incorporated in the model by assuming that the money supply process entails a small but nonzero probability of a sizable discrete shift in the money supply.In addition, the severity of a peso problem can vary over time.The procedure used in solving our model is more complicated than the standard solution methods for rational expectation models in that there are two dates at which expectations are formed. Both deterministic and stochastic simulations were used in the analysis.Results from the deterministic simulations suggest that the presence of the peso problem leads to an overvalued real exchange rate and a higher ex ante real interest rate, which results in output losses.In the stochastic simulations, the values of the IS, AS and monetary disturbances vary along with the severity of the peso problem.The simulations show that the presence of a variable peso problem affects the correlations between macroeconomic variables, especially between the ex post yield differential and either the real exchange rate or the output gap.In the case of conventional (non-autocorrelated) IS, AS and monetary disturbances, these correlation coefficients are equal to, zero.The inclusion of a variable peso problem in the simulation model changes these results: the ex post yield differential is now correlated with the real exchange rate and the output gap. In the empirical part of the paper we demonstrate the applicability of our simulation results using Canada and the United Kingdom as examples. Keywords: peso problem, credibility, simulation
  • Lehmussaari, Olli-Pekka; Suvanto, Antti; Vajanne, Laura (1992)
    Bank of Finland Research Discussion Papers 37/1992
    This paper examines developments in the Finnish money and foreign exchange markets in the light of the recent literature on target-zones. The basket-pegging system, which was officially adopted in Finland in late 1977, provides a good opportunity to discuss some of the implications of the target-zone models. Analysis concentrates on the period after 1987 when the assumptions underlying the basic target-zone model can assumed to be fulfilled. Although empirical exchange rate distributions of the Finnish markka do not seem to resemble those predicted by the basic target-zone model, the findings of the paper support the view that for a given period Finnish data exhibit some of the implications of target-zone models. The results, however, indicate that causality rons from the interest rate differential to the exchange rate and not from the exchange rate to the interest rate differential as implied by the basic (credible) target-zone model. In addition, intervention practices carried out by the central bank appear to have played an important role in determining the expected future exchange rate within the currency band.
  • Sénégas, Marc-Alexandre; Vilmunen, Jouko (1999)
    Suomen Pankin keskustelualoitteita 14/1999
    In this paper we address the issue of how parameter uncertainty affects the optimal degree of central bank conservatism.The analysis is conducted in the standard macroeconomic model of a monetary policy game embedding an expectational Phillips-curve. Multiplicative "Brainard" uncertainty is added to the model.This means that the central bank's policy instrument has a stochastic impact on inflation.This type of uncertainty is particularly interesting, since it affects the credibility-flexibility tradeoff in monetary policymaking.We show that if the flexibility problem dominates, an increase in uncertainty reduces optimal conservatism. However, increases in uncertainty can also require increases in the optimal degree of conservatism.This happens when the central bank has a sufficiently large credibility problem.This is particularly clear in the case of the introduction of uncertainty at the margin. Furthermore, the coefficient of variation of inflation appears to contain useful information about the relative size of the credibility problem and, hence, about how incipient uncertainty can affect optimal conservatism in actual economies. Keywords: credibility, flexibility, monetary policy, conservatism, uncertainty
  • Blagov, Boris; Funke, Michael (2013)
    BOFIT Discussion Papers 24/2013
    Published in Macroeconomic Dynamics, Vol 23, No 6 (2019), pp. 2434-2468
    An estimated Markov-switching DSGE modelling framework that allows for parameter shifts across regimes is employed to test the hypothesis of regime-dependent credibility of Hong Kong's linked exchange rate system. The model distinguishes two regimes with respect to the time-series properties of the risk premium. Regime-dependent impulse responses to macroeconomic shocks reveal substantial differences in spreads. These findings contribute to efforts at modelling exchange rate regime credibility as a non-linear process with two distinct regimes. Keywords: Markov-switching DSGE models, exchange rate regime credibility, Hong Kong. JEL-Classification: E32, F41, C51, C52
  • Tarkka, Juha; Mayes, David (1999)
    Suomen Pankin keskustelualoitteita 22/1999
    The aim of the present analysis is to shed light on the question whether Central Banks should publish their macroeconomic forecasts, and what could possibly be gained in monetary policy if they did so.We show that disclosing the Central Bank's assessment of the prevailing inflationary pressures in the form of a forecast improves macroeconomic performance even if this assessment is imprecise.This is because it makes policy more predictable.We are also interested in finding out the useful content of the forecasts, if published, and answering the question whether it makes a difference if these official forecasts are "unconditional" in the sense of incorporating the Central Bank's forecasts of its own policy as well, or "conditional" on some other policy assumption. Possible conditional alternatives may include assuming unchanged instruments, however specified, or assuming the kind of policy that the private sector is estimated to expect.The analysis comes out in favour of publishing unconditional forecasts, which reveal the intended results of monetary policy.A discussion of some practical issues related to publishing official macroeconomic forecasts is also provided. Key words: forecasting, transparency, monetary policy, central banks
  • Haavio, Markus; Jalasjoki, Pirkka; Kilponen, Juha; Paloviita, Maritta (2021)
    International Journal of Central Banking 2 (June)
    Published also in BoF DP 29/2017
    Using unique real-time quarterly macroeconomic projections of the Eurosystem/ECB staff, we estimate competing specifications of the ECB's monetary policy reaction function. We consider specifications which include inflation and output growth projections, a past inflation gap, a time-varying natural real interest rate, and different inflation targets. Our first key finding is that the de facto inflation target of the ECB lies between 1.6 percent and 1.8 percent. Our second key finding is that the ECB reacts both to short-term macroeconomic projections and to past deviations of inflation from its de facto target.
  • Paloviita, Maritta; Haavio, Markus; Jalasjoki, Pirkka; Kilponen, Juha (2017)
    Bank of Finland Research Discussion Papers 29/2017
    Published in International Journal of Central Banking 2021 ; 17 ; 2 ; June
    We estimate the ECB’s monetary policy reaction function by using real time Eurosystem/ECB staff macroeconomic projection data, which are presented to the ECB’s Governing Council when it assesses the monetary policy stance in the euro area. Alternative specifications of the reaction function account for a possible credibility loss due to persistent deviations of past inflation from the ECB’s inflation target. The results provide support for two alternative interpretations of the definition of price stability. First, the ECB dislikes inflation rates above two percent more than rates below two percent. Second, the ECB policy responses to past inflation gaps are symmetric with respect to a target of 1.6 - 1.7 percent. The out-of-sample predictions of the reaction function based on the second interpretation of the definition of price stability track well an estimated shadow interest rate during the zero lower bound period.
  • Haaparanta, Pertti (1990)
    Bank of Finland Research Discussion Papers 9/1990
    It is argued that if in a dynamic context a central bank wants to signal its commitment to non-inflationary policies an EMS membership makes its task easier by requiring less restrictive policies than if it stays outo Despite this depending on the initial beliefs of the public the central bank may not like to be an EMS member. It is also shown that the EMS membership has partial signalling value in that the public thinks that a central bank choosing EMS is non-inflationary with a higher probability than a bank staying outside.