Federal Reserve Bank of Dallas Globalization and Monetary Policy Institute - Ultra Easy Monetary Policy and the Law of Unintended Consequences* pptx

... remainvacantaftertheirpurchase.65Onreturningfromavisitto the USin the late1920’s,Hayekforetoldadeepslump.Onbeingtoldthiswasimpossible,becauseUSpriceswereessentialstable,Hayekapparentlyrespondedthatthiswasprecisely the evidence of anunderlyingproblem.Increasesinproductivityshouldhavebeenpushingpricesdown,butcreditexpansionwasholdingthembackup.66Ineffect,savingswouldproveinadequatetopurchaseall of the goods and servicesprovidedby the increasedinvestmentgeneratedartificiallybycreditreceivedfrom the bankingsystem.67Among the AME’s,onlyGermany,Switzerland and Japanfailedtoreflectthesedevelopments.Inpart,thiswasbecauseallthreecountrieswerestillrecoveringfromtheirown,earlier,housepricebubbles.68Suchconcernshavebeenexpressedin the variouscountryreviewsorganizedby the Economic and DevelopmentReviewCommittee of the OECD.Australia,NewZealand,Canada, the Scandinaviancountries and anumber of othersallseemtobeexposedinthisregard. Federal Reserve Bank of Dallas Globalization and Monetary Policy Institute Working Paper No. 126 http://www.dallasfed.org/assets/documents /institute/ wpapers/2012/0126.pdf Ultra Easy Monetary Policy ... available.Losseswillhavetobe98Singh(2011)providesevidence of howthispracticefluctuateswith the creditcycle.99Thisisconsistentwith the hypothesis of psychologiststhatmosthumanssufferfrom“disastermyopia”.Thiscouldbe the result of survivalstrategiesbecominghardwiredovermillions of years of evolution.2 Ultra Easy Monetary Policy and the Law of Unintended Consequences2ByWilliamWhite A. Introduction The centralbanks of the advancedmarketeconomies(AME’s)3haveembarkeduponone of the greatesteconomicexperiments of alltime‐ ultra easy monetary policy. In the aftermath of the economic ... Introduction The centralbanks of the advancedmarketeconomies(AME’s)3haveembarkeduponone of the greatesteconomicexperiments of alltime‐ ultra easy monetary policy. In the aftermath of the economic and financial crisis which began in the summer of 2007, they...

... helpfulcomments and conversations. The views expressed in this paper are those of the authors and donot necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve ... as the liquidity of a market for the long-run te chnology. From thatperspective, our result states that the higher the liquidity of the market for the long-termtechnology, the lower the ex-ante ... lines of Skeie (2008) and Martin (2006). In the nominalversion of the model, the central bank targets the real interbank rate by o¤ering to borrow and lend at a nominal rate in …at central bank reserves...

... are those of the authors and not necessarily those of the Federal Reserve Bank of Minneapolis or the Federal Reserve System.Central banks routinely state monetary policies in terms of interest ... terms of interest rates,we examine the question of whether money and interestrates have the same relationship when central banks for-mulate monetary policy in terms of an interest rate rulerather ... both.Long-Run CorrelationsFirst we examine the relationships between the averagerate of money growth and the average of the annual in-terest rates over the period from 1961 to 1998. The in-dividual...

... “Interest on Reserves and Monetary Policy. ” Federal Reserve Bank of New York Economic Policy Review 8, no. 1 (May): 1 3-2 9. Proceedings of a Conference Sponsored by the Federal Reserve Bank of New ... Reserve Bank of New Zealand’s operating framework. 11 Sources of Bank Reserves Figure 5 illustrates the link between the size of the Federal Reserve s liquidity facilities and the quantity of ... many reserves. The examples show how the quantity of bank reserves isdetermined by the size of the Federal Reserve s policy initiatives and in no way reflects the initiatives’ effects on bank...

... specified in Decree 2 2-2 006-ND-CP. 15. Article 7.6 and Article 8.2(b) of Decree 2 2-2 006-ND-CP. 16. Article 11 and Article 32 of Decree 2 2-2 006-ND-CP. 17. Federal Reserve Bank of San Francisco, Country ... diversify the market participants in the banking industry, strengthen the resiliency of the banking sector, and follow internationally accepted banking standards. The success of further reform and ... infrastruc-ture department to the Bank for Investment and De-velopment of Viet Nam (BIDV). The SBV’s role was narrowed to that of a central bank, including the formulation of monetary policy, ...

... II, and III, credit to AIG, and other Fed assets. Liabilities: Other—Reverse repos, Treasury cash holdings, and deposits with Federal Reserve Banks other than reserve balances and excluding the ... with Federal Reserve banks (part of “Other”). Assets: Lending to nonbanks—TALF, CPFF, AMLF, and MMIFF; Short-term lending to financials—discount window, TAF, currency swaps, PDCF, and repos; ... Federal Reserve Summary The balance sheet remained little changed, decreasing by $9 billion for the week ended September 15. Bank reserve balances decreased $118 billion, offset...

... necessar-ily reective of views at the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors. Federal Reserve Bank of New ... authors and do not necessarily reect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Abstract The rapid growth of the market-based nancial system since the ... “internal” shadow banking sub-system refers to the credit intermediation process of a global network of banks, finance companies, broker-dealers and asset managers and their on- and off-balance sheet...

... discussion and elicit comments. The views expressed in this paper are those of the authors and are not necessar-ily reective of views at the Federal Reserve Bank of New York or the Federal Reserve ... retrospect, the change in application of bankruptcy law to the treatment of repos was perhaps the most important change. Since the enactment of the Bankruptcy Amendments and Federal Judgeship Act of ... the model above, the presence of minimum capital and liquidity standards mitigates these incentives, and the ability of banks to evade binding standards permits them to maximize the value of...

... furthermore, the presence of the expectation of future contraction, μˆYL, on the right-hand side of the AD equation. The expectation of futurecontraction makes the effect of both the shock and ... necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. the value for φIIis chosen so that the output in the fourth quarter of the "contraction" ... necessarilyreflective of views at the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the author. policy choice of ˆGSt. Let us...

... Chari∗University of Minnesota and Federal Reserve Bank of MinneapolisPatrick J. Kehoe∗ Federal Reserve Bank of MinneapolisandUniversityofMinnesotaEllen R. M cG ratta n∗ Federal Reserve Bank of MinneapolisandUniversityofMinnesotaABSTRACTWe ... those of the authors and not necessarily thos e of the Federal Reserve Bank of Minneapolis or the Federal Reserve System.Table I displays the resulting estimated values f or the parameters of the ... futurevalues of consumption, the capital stock, the wedges, and so on. The equilibrium of the model dependson these expectations and, therefore, on the stochastic process driving the wedges. The third...