Does my model predict a forward guidance puzzle?

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dc.contributor Bank of Finland
dc.contributor.author Gibbs, Christopher G.
dc.contributor.author McClung, Nigel
dc.date.accessioned 2019-09-10T12:11:48Z
dc.date.available 2019-09-10T12:11:48Z
dc.date.issued 2019
dc.identifier.isbn 978-952-323-294-5
dc.identifier.issn 1456-6184
dc.identifier.uri https://helda.helsinki.fi/bof/handle/123456789/16325
dc.description.abstract 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.
dc.format.extent 39
dc.language.iso ENG
dc.rights https://helda.helsinki.fi/bof/copyright
dc.subject vakaus
dc.subject mallit
dc.subject korot
dc.subject.other Forward Guidance Puzzle
dc.subject.other Expectations
dc.subject.other Learning
dc.subject.other Stability
dc.title Does my model predict a forward guidance puzzle?
dc.type Paper
dc.identifier.urn URN:NBN:fi:bof-201909101452
dc.subject.jel E31
dc.subject.jel E32
dc.subject.jel E52
dc.subject.jel D84
dc.subject.jel D83
dc.series.name Bank of Finland Research Discussion Papers
dc.series.year 2019
dc.series.number 19/2019
dc.series.sortingnumber 0019
dc.date.publication 10.9.2019
dc.subject.yso odotukset
dc.subject.yso oppiminen
dc.subject.yso rahapolitiikka
bof-internal.includedInCRIS 1
dc.type.okm D4

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