Athanasios Orphanides

The Macroeconomic Consequences of Terrorism (2007)

Este documento analiza la robustez de las políticas de control óptimo derivadas bajo el supuesto de expectativas racionales en modelos con formación alternativa de expectativas y con tasas...

Gregory Hess, Athanasios Orpanides, S. Brock Blomberg, Gregory D. Hess, Athanasios Orphanides

Macroeconomics of

MONETARY POLICY EFFECTIVENESS WHEN NOMINAL INTEREST RATES ARE BOUNDED AT ZERO 1 BY GÜNTER COENEN 2, (2007)

Athanasios Orphanides, Athanasios Orphanides, Volker Wieland, Volker Wieland

Telex 411 144 ecb d

Board of Governors of the Federal Reserve System (2007)

Philip N. Jefferson, Athanasios Orphanides, Richard Porter

This paper evaluates the quantitative importance of removing U.S. currency held abroad from the monetary base. We find that a simple macroeconometric model that uses home base has more explanatory...

Board of Governors of the Federal Reserve System (2007)

Yvan Lengwiler, Athanasios Orphanides

This paper investigates the desirability of adopting a rule in favor of discretionary monetary policy in a model exhibiting Kydland and Prescott's dynamic inconsistency problem. We deviate from...

Ecole des Hautes (2007)

Athanasios Orphanides, Simon Van Norden, Etudes Commerciales Montr'eal

Compared to its central role in policy discussions in the United States and most other developed countries, the reliability of the measurement of the output gap has attracted relatively little...

SWIND009.tex Comments welcome. Indicator Variables for Optimal Policy ∗ (2007)

Michael Woodford, Harris Dellas, James Hamilton, Henrik Jensen, ...

The optimal weights on indicators in models with partial information about the state of the economy and forward-looking variables are derived and interpreted, both for equilibria under discretion and...

An Application to U.S. Monetary Policy (2007)

Thomas A. Lubik, Frank Schorfheide, Jinill Kim, Eric Leeper, Athanasios Orphanides, ...

This paper considers a prototypical monetary business cycle model for the U.S. economy, in which the equilibrium is undetermined if monetary policy is `passive'. In previous multivariate studies...

Les organisations-partenaires / The Partner Organizations (2007)

Athanasios Orphanides, Simon Van Norden, Série Scientifique, École Hautes, Études Commerciales, ...

permise avec citation du document source, incluant la notice ©. Short sections may be quoted without explicit permission, if full credit, including © notice, is given to the source. CIRANO Le...

A quantitative exploration of the opportunistic approach to disinflation (2006)

Aksoy, Yunus, Orphanides, Athanasios, Small, David, Wieland, Volker, Wilcox, David

Under a conventional policy rule, a central bank adjusts its policy rate linearly according to the gap between inflation and its target, and the gap between output and its potential. Under “the...

A quantitative exploration of the opportunistic approach to disinflation (2006)

Aksoy, Yunus, Orphanides, Athanasios, Small, David, Wieland, Volker, Wilcox, David

Under a conventional policy rule, a central bank adjusts its policy rate linearly according to the gap between inflation and its target, and the gap between output and its potential. Under “the...

Inflation Targeting Under Imperfect Knowledge (2006)

Inflation Targeting Under Imperfect Knowledge (2006)

Un principio central del esquema de metas de inflación es la importancia que se da a establecer y mantener bien ancladas las expectativas inflacionarias. En este artículo revisamos el papel que...

The Reliability of Inflation Forecasts Based on Output Gap Estimates in Real Time (2005)

are preliminary materials circulated to stimulate discussion and critical comment. The analysis and conclusions set forth are those of the authors and do not indicate concurrence by other members of...

Orphanides, Athanasios., Van Norden, Simon.

Journal of Money, Credit, and Banking - Volume 37, Number 3, June 2005

Monetary Policy Rules, Macroeconomic Stability, and Inflation: A View from the Trenches (2004)

Orphanides, Athanasios.

Journal of Money, Credit, and Banking - Volume 36, Number 2, March 2004

Price Stability and Monetary Policy Effectiveness when Nominal Interest Rates are Bounded at Zero (2004)

Coenen, GÃ¼nter, Orphanides, Athanasios, Wieland, Volker

This paper employs stochastic simulations of a small structural rational expectations model to investigate the consequences of the zero bound on nominal interest rates. We find that if the economy is...

Price Stability and Monetary Policy Effectiveness when Nominal Interest Rates are Bounded at Zero (2004)

Coenen, GÃ¼nter, Orphanides, Athanasios, Wieland, Volker

This paper employs stochastic simulations of a small structural rational expectations model to investigate the consequences of the zero bound on nominal interest rates. We find that if the economy is...

Price Stability and Monetary Policy Effectiveness when Nominal Interest Rates are Bounded at Zero (2004)

Coenen, GÃ¼nter, Orphanides, Athanasios, Wieland, Volker

This paper employs stochastic simulations of a small structural rational expectations model to investigate the consequences of the zero bound on nominal interest rates. We find that if the economy is...

Price Stability and Monetary Policy Effectiveness when Nominal Interest Rates are Bounded at Zero (2004)

Coenen, GÃ¼nter, Orphanides, Athanasios, Wieland, Volker

This paper employs stochastic simulations of a small structural rational expectations model to investigate the consequences of the zero bound on nominal interest rates. We find that if the economy is...

The Reliability of Inflation Forecasts Based on Output Gap Estimates in Real Time (2004)

Monetary Policy When the Nominal Short-Term Interest Rate is Zero (2003)

A stable predictive relationship between inflation and the output gap, often referred to as a Phillips curve, provides the basis for countercyclical monetary policy in many models. In this paper, we...

Clouse, James, Henderson, Dale, Orphanides, Athanasios, Small, David H., Tinsley, P.A.

In an environment of low inflation, the Federal Reserve faces the possibility that it may not have provided enough monetary stimulus even though it had pushed the short-term nominal interest rate to...

Monetary Policy When the Nominal Short-Term Interest Rate is Zero (2003)

Clouse, James, Henderson, Dale, Orphanides, Athanasios, Small, David H., Tinsley, P.A.

In an environment of low inflation, the Federal Reserve faces the possibility that it may not have provided enough monetary stimulus even though it had pushed the short-term nominal interest rate to...

Monetary Policy When the Nominal Short-Term Interest Rate is Zero (2003)

Clouse, James, Henderson, Dale, Orphanides, Athanasios, Small, David H., Tinsley, P.A.

In an environment of low inflation, the Federal Reserve faces the possibility that it may not have provided enough monetary stimulus even though it had pushed the short-term nominal interest rate to...

Monetary Policy When the Nominal Short-Term Interest Rate is Zero (2003)

Clouse, James, Henderson, Dale, Orphanides, Athanasios, Small, David H., Tinsley, P.A.

In an environment of low inflation, the Federal Reserve faces the possibility that it may not have provided enough monetary stimulus even though it had pushed the short-term nominal interest rate to...

Robust Monetary Policy Rules with Unknown Natural Rates (2003)

Orphanides, Athanasios., Williams, John C. (John Carroll)

Brookings Papers on Economic Activity - 2002, 2

The Reliability of Inflation Forecasts Based on Output Gap Estimates in Real Time (2003)

The Reliability of Inflation Forecasts Based on Output Gap Estimates in Real Time (2003)

Dans ce papier, on jauge l'utilité de plusieurs estimations (univariées autant que multivariées) de l'écart de production pour prévoir le taux d'inflation. Une analyse ex post suggère que...

Monetary Policy in Deflation: The Liquidity Trap (2003)

Dans ce papier, on jauge l'utilité de plusieurs estimations (univariées autant que multivariées) de l'écart de production pour prévoir le taux d'inflation. Une analyse ex post suggère que...

Athanasios Orphanides, Charalambos Christofides, Takeshi Kimura

The experience of the U.S. economy during the mid-1930s, when short-term nominal interest rates were continuously close to zero, is sometimes taken as evidence that monetary policy was ineffective...

Historical Monetary Policy Analysis and the Taylor Rule (2003)

Comment on The Conduct of Monetary Policy with a Shrinking Stock of Government Debt (2002)

∗ Preliminary draft. Prepared for the November 2002 Carnegie-Rochsester conference. [Thanks.] The opinions expressed are those of the author and do not necessarily reflect views of the Board of...

Orphanides, Athanasios.

Journal of Money, Credit, and Banking - Volume 34, Number 3 (Part 2), August 2002

SWIND201.tex Comments welcome. Indicator Variables for Optimal Policy ∗ (2002)

Michael Woodford, Harris Dellas, James Hamilton, Henrik Jensen, ...

The optimal weights on indicators in models with partial information about the state of the economy and forward-looking variables are derived and interpreted, both for equilibria under discretion and...

The Unreliability of Output Gap Estimates in Real Time (2001)

The Unreliability of Output Gap Estimates in Real Time (2001)

Nous examinons la fiabilité de plusieurs méthodes qui sont utilisés pour rendre des séries chronologiques stationnaires, en portant une attention particulière à la précision des estimations en...

The Unreliability of Output Gap Estimates in Real Time (2001)

Nous examinons la fiabilité de plusieurs méthodes qui sont utilisés pour rendre des séries chronologiques stationnaires, en portant une attention particulière à la précision des estimations en...

Athanasios Orphanides, Simon Van Norden, Série Scientifique, ...

Nous examinons la fiabilit de plusieurs mthodes qui sont utiliss pour rendre des sries chronologiques stationnaires, en portant une attention particulire la prcision des estimations en temps rel de...

2000. Inflation zone targeting (2000)

Athanasios Orphanides, Athanasios Orphanides, Volker Wieland, Volker Wieland

Telex 411 144 ecb d

Efficient monetary policy design near price stability (2000)

Athanasios Orphanides, Volker Wiel

We study the design of monetary policy in a low inflation environment taking into account the limitations imposed by the zero bound on nominal interest rates. Using numerical dynamic programming...

Errors in the measurement of the output gap and the design of monetary policy (2000)

Athanasios Orphanides, Richard D. Porter, David Reifschneider, Robert Tetlow, Frederico Finan

We exploit data on historical revisions to real-time estimates of the output gap to examine the implications of measurement error for the design of monetary policy, using the Federal Reserve’s...

the Board of Governors of the Federal Reserve System, jointly presented their paper on “The Performance of ForecastBased Monetary Policy Rules under Model uncertainty”. Their quantitative analysis compared forecast-based monetary policy rules with outcome (1999)

Athanasios Orphanides, John C. Williams, Federal Reserve, Bank San Francisco

We develop an estimated model of the U.S. economy in which agents form expectations by continually updating their beliefs regarding the behavior of the economy and monetary policy. We explore the...

Robustness of simple monetary policy rules under model uncertainty (1999)

Andrew Levin, Volker Wiel, John C. Williams, Larry Christiano, David Lindsey, ...

Conference on Monetary Policy Rules. The views expressed here are solely the responsibility of the authors, and should not be interpreted as reflecting the views of the Board of Governors of the...

Monetary Policy when the Nominal Short-Term Interest Rate is Zero,” unpublished, Federal Reserve Board (1999)

James Clouse, Dale Henderson, Athanasios Orphanides, David Small, Peter Tinsley

∗ The opinions in this paper are those of the authors and do not necessarily reflect the views of the staff or members of the Board of Governors of the Federal Reserve System in general or the...

the Board of Governors of the Federal Reserve System, jointly presented their paper on “The Performance of ForecastBased Monetary Policy Rules under Model uncertainty”. Their quantitative analysis compared forecast-based monetary policy rules with outcome (1999)

Three Lessons for Monetary Policy in a Low Inflation Era (1999)

This paper examines the role of compensation contracts in determining risk taking decisions by money managers in the financial industry. A methodology is developed for empirically testing and...

David Reifschneider, John C. Williams, Athanasios Orphanides, Michael Prell, David Small, David Stockton, ...

The zero lower bound on nominal interest rates constrains the central bank's ability to stimulate the economy during downturns. We use the FRB/US model to quantify the effects of the bound on...

the Board of Governors of the Federal Reserve System, jointly presented their paper on “The Performance of ForecastBased Monetary Policy Rules under Model uncertainty”. Their quantitative analysis compared forecast-based monetary policy rules with outcome (1999)

Athanasios Orphanides, Volker Wiel

We study the design of monetary policy in a low inflation environment taking into account the limitations imposed by the zero bound on nominal interest rates. Using numerical dynamic programming...

Monetary Policy when the Nominal Short-Term Interest Rate is Zero,” unpublished, Federal Reserve Board (1999)

James Clouse, Dale Henderson, Athanasios Orphanides, David Small, Peter Tinsley

∗ The opinions in this paper are those of the authors and do not necessarily reflect the views of the staff or members of the Board of Governors of the Federal Reserve System in general or the...

Optimal Monetary Policy Inertia (1999)

Michael Woodford, Gregory Chow, Ray Fair, Mark Gertler, Marvin Goodfriend, Pat Kehoe, ...

this paper is defined below in (3.38).) A slightly higher value of #, but in any event well below .4, would match this precisely. At the same time, this value implies a shadow value (in terms of...

The Reliability of Inflation Forecasts Based on (1999)

Output Gap Estimates, Athanasios Orphanides, Simon Van Norden

A stable predictive relationship between inflation and the output gap, often referred to as a Phillips curve, provides the basis for countercyclical monetary policy in many models. In this paper, we...

Earnings Forecasts and the Predictability of Stock Returns: Evidence from Trading the S&P (1997)

Joel L, Athanasios Orphanides, Martha Douvogiannis

We develop a simple error-correction model, based on a well known theory espoused by Benjamin Graham and David Dodd, and others, which presumes stock returns tend to restore an equilibrium...

A Quantitative Exploration of the Opportunistic Approach to Disinflation (1997)

Athanasios Orphanides, David H. Small, Volker Wiel, David W. Wilcox

A number of observers have advocated recently that the Federal Reserve take an "opportunistic " approach to the conduct of monetary policy. A hallmark of this approach is that the...

A Quantitative Exploration of the Opportunistic Approach to Disinflation (1997)

Athanasios Orphanides, David H. Small, Volker Wiel, David W. Wilcox

A number of observers have advocated recently that the Federal Reserve take an �opportunistic" approach to the conduct of monetary policy. A hallmark of this approach is that the central...

Earnings Forecasts and the Predictability of Stock Returns: Evidence from Trading the S&P (1997)

Joel L, Athanasios Orphanides, Martha Douvogiannis

We develop a simple error-correction model, based on a well known theory espoused by Benjamin Graham and David Dodd, and others, which presumes stock returns tend to restore an equilibrium...

Inflation, Volatility and Growth (1996)

Ruth Judson, Athanasios Orphanides

This paper re-examines the relationship between inflation, inflation volatility and growth using cross-country panel data for the past 30 years. With regard to the level of inflation, we find that in...

The Opportunistic Approach to Disinflation (1996)

Athanasios Orphanides, David W. Wilcox

This paper explores the theoretical foundations of a new approach to monetary policy. Proponents of this approach hold that when inflation is moderate but still above the long-run objective, the Fed...

In�ation, Volatility and Growth � (1996)

Ruth Judson, Athanasios Orphanides

This paper re-examines the relationship between in�ation, in�ation volatility and growth using cross-country panel data for the past 30 years. With regard to the level of in�ation, we �nd...

Essays in macroeconomics /--by Athanasios Orphanides. (1990)

Orphanides, Athanasios.

Supervised by Olivier Blanchard and Rudiger Dornbusch.

Term Structure Estimation with Survey Data on Interest Rate Forecasts

Kim, Don H., Orphanides, Athanasios

The estimation of dynamic no-arbitrage term structure models with a flexible specification of the market price of risk is beset by a severe small-sample problem arising from the highly persistent...

Inflation Scares and Forecast-Based Monetary Policy

Orphanides, Athanasios, Williams, John C

Central bankers frequently emphasize the critical importance of anchoring private inflation expectations for successful monetary policy and macroeconomic stabilization. In most monetary policy...

Term structure estimation with survey data on interest rate forecasts

Don H. Kim, Athanasios Orphanides

The estimation of dynamic no-arbitrage term structure models with a flexible specification of the market price of risk is beset by a severe small-sample problem arising from the highly persistent...

Monetary policy with imperfect knowledge

Expectations, learning and monetary policy

We examine the performance and robustness of monetary policy rules when the central bank and the public have imperfect knowledge of the economy and continuously update their estimates of model...

The decline of activist stabilization policy: Natural rate misperceptions, learning, and expectations

Monetary policy with imperfect knowledge

Robust Monetary Policy with Imperfect Knowledge

We examine the performance and robustness of monetary policy rules when the central bank and the public have imperfect knowledge of the economy and continuously update their estimates of model...

John C Williams, Athanasios Orphanides

We examine the performance and robustness properties of monetary policy rules in an estimated macroeconomic model in which the economy undergoes structural change and where private agents and the...

Term Structure Estimation with Survey Data on Interest Rate Forecasts

Athanasios Orphanides, Don H. Kim

The estimation of dynamic term structure models with flexible specification of market price of risk is beset by a severe small-sample problem arising from the highly persistent nature of interest...

The decline of activist stabilization policy: natural rate misperceptions, learning, and expectations

Real-time data and monetary policy

We develop an estimated model of the U.S. economy in which agents form expectations by continually updating their beliefs regarding the behavior of the economy and monetary policy. We explore the...

Herrmann, Heinz, Orphanides, Athanasios, Siklos, Pierre L.

Inflation scares and forecast-based monetary policy

Money, inflation and growth

Central bankers frequently emphasize the critical importance of anchoring private inflation expectations for successful monetary policy and macroeconomic stabilization. In most monetary policy...

Orphanides, Athanasios, Solow, Robert M., B. M. Friedman, F. H. Hahn

The reform of October 1979: how it happened and why

David E. Lindsey, Athanasios Orphanides, Robert H. Rasche

This study offers a historical review of the monetary policy reform of October 6, 1979, and discusses the influences behind it and its significance. We lay out the record from the start of 1979...

Rational Addiction with Learning and Regret.

Orphanides, Athanasios, Zervos, David

The authors present a theory of rational behavior in which individuals maximize a set of stable preferences over goods with unknown addictive power. The theory is based on three fundamental...

A Quantitative Exploration of the Opportunistic Approach to Disinflation

Yunus Aksoy, Athanasios Orphanides, David Small, Volker Wieland, David Wilcox

Under a conventional policy rule, a central bank adjusts its policy rate linearly according to the gap between inflation and its target, and the gap between output and its potential. Under “the...

The road to price stability

Inflation scares and forecast-based monetary policy

Nearly a quarter-century after Paul Volcker's declaration of war on inflation on October 6, 1979, Alan Greenspan declared that the goal had been achieved. Drawing on the extensive historical record,...

Leverage as a State Variable for Employment, Inventory Accumulation, andFixed Investment

Central banks pay close attention to inflation expectations. In standard models, however, inflation expectations are tied down by the assumption of rational expectations and should be of little...

Charles W. Calomiris, Athanasios Orphanides, Steven A. Sharpe

The importance of a firm's balance sheet for determining its investment and employment decisions is the central assumption of macroeconomic models of 'debt deflation' or 'debt overhang.' According to...

The Decline of Activist Stabilization Policy: Natural Rate Misperceptions, Learning, and Expectations

Comment on: "The incredible Volcker disinflation"

We develop an estimated model of the U.S. economy in which agents form expectations by continually updating their beliefs regarding the behavior of the economy and monetary policy. We explore the...

Gregory D. Hess, Athanasios Orphanides

War and Democracy

We present a general equilibrium model of conflict to investigate whether the prevalence of democracy is sufficient to foster the perpetual peace hypothesized by Immanuel Kant and whether the world...

The Macroeconomic Consequences of Terrorism

S. Brock Blomberg, Gregory Hess, Athanasios Orphanides

We perform an empirical investigation of the macroeconomic consequences of international terrorism and interactions with alternative forms of collective violence. Our analysis is based on a rich...

Monetary policy rules and the Great Inflation

The road to price stability

The nature of monetary policy during the 1970s is evaluated through the lens of a forward-looking Taylor rule based on perceptions regarding the outlook for inflation and unemployment at the time...

Monetary policy in deflation: the liquidity trap in history and practice

Nearly a quarter-century after Paul Volcker's declaration of war on inflation on October 6, 1979, Alan Greenspan declared that the goal had been achieved. Drawing on the extensive historical record,...

The macroeconomic consequences of terrorism

The experience of the U.S. economy during the mid-1930s, when short-term nominal interest rates were continuously close to zero, is sometimes taken as evidence that monetary policy was ineffective...

Blomberg, S. Brock, Hess, Gregory D., Orphanides, Athanasios

Monetary Policy When the Nominal Short-Term Interest Rate is Zero

James Clouse, Dale Henderson, Athanasios Orphanides, David Small, P.A. Tinsley

In an environment of low inflation, the Federal Reserve faces the possibility that it may not have provided enough monetary stimulus even though it had pushed the short-term nominal interest rate to...

The Reliability of Inflation Forecasts Based on Output Gap Estimates in Real Time.

Monetary Policy Rules, Macroeconomic Stability, and Inflation: A View from the Trenches.

A stable predictive relationship between inflation and the output gap, often referred to as a Phillips curve, provides the basis for countercyclical monetary policy in many models. In this paper, we...

Inflation Targeting under Imperfect Knowledge

I estimate a forward-looking monetary policy reaction function for the Federal Reserve for the periods before and after Paul Volcker's appointment as Chairman in 1979, using information that was...

Orphanides, Athanasios, Williams, John C

A central tenet of inflation targeting is that establishing and maintaining well-anchored inflation expectations are essential. In this paper, we reexamine the role of key elements of the inflation...

Price Stability and Monetary Policy Effectiveness when Nominal Interest Rates are Bounded at Zero

Guenter Coenen, Athanasios Orphanides, Volker Wieland

This paper employs stochastic simulations of a small structural rational expectations model to investigate the consequences of the zero bound on nominal interest rates. We find that if the economy is...

Imperfect Knowledge, Inflation Expectations, and Monetary Policy

The Reform of October 1979: How It Happened and Why

This paper investigates the role that imperfect knowledge about the structure of the economy plays in the formation of expectations, macroeconomic dynamics, and the efficient formulation of monetary...

David E. Lindsey, Athanasios Orphanides, Robert H. Rasche

This study offers a historical review of the monetary policy reform of October 6, 1979, and discusses the influences behind it and its significance. We lay out the record from the start of 1979...

Inflation targeting under imperfect knowledge

Inflation Targeting under Imperfect Knowledge

A central tenet of inflation targeting is that establishing and maintaining well-anchored inflation expectations are essential. In this paper, we reexamine the role of key elements of the inflation...

Inflation Targeting Under Imperfect Knowledge

The central tenet of inflation targeting is the anchoring of inflation expectations. In this paper, we reexamine the role of key elements of the inflation targeting framework towards this end, in the...

The Road to Price Stability

A central tenet of inflation targeting is that establishing and maintaining well-anchored inflation expectations are essential. In this paper, we reexamine the role of key elements of the inflation...

Inflation targeting under imperfect knowledge

A central tenet of inflation targeting is that establishing and maintaining well-anchored inflation expectations are essential. In this paper, we reexamine the role of key elements of the inflation...

Taylor rules

Taylor rules are simple monetary policy rules that prescribe how a central bank should adjust its interest rate policy instrument in a systematic manner in response to developments in inflation and...

We examine the performance and robustness properties of monetary policy rules in an estimated macroeconomic model in which the economy undergoes structural change and where private agents and the...

Inflation zone targetting

We examine the performance and robustness properties of monetary policy rules in an estimated macroeconomic model in which the economy undergoes structural change and where private agents and the...

The quest for prosperity without inflation.

We study optimal monetary policy design in a simple model that deviates from the linear-quadratic paradigm and provides a rationale for the practice of inflation zone targeting. We show that the...

Monetary policy rules, macroeconomic stability and inflation: a view from the trenches.

In recent years, activist monetary policy rules responding to inflation and the level of economic activity have been advanced as a means of achieving effective output stabilization without inflation....

I estimate a forward-looking monetary policy reaction function for the Federal Reserve for the periods before and after Paul Volcker's appointment as Chairman in 1979, using information that was...

Imperfect Central Bank Communication: Information versus Distraction

We examine the performance and robustness properties of monetary policy rules in an estimated macroeconomic model in which the economy undergoes structural change and where private agents and the...

Dale, Spencer, Orphanides, Athanasios, Österholm, Pär

Much of the information communicated by central banks is noisy or imperfect. This paper considers the potential benefits and limitations of central bank communications in a model of imperfect...

Robust Monetary Policy Rules with Unknown Natural Rates

War Politics: An Economic, Rational-Voter Framework.

macroeconomics, Robust Monetary Policy Rules, Natural Rates

Hess, Gregory D, Orphanides, Athanasios

The frequency of foreign conflict initiations in the United States is found to be significantly greater following the onset of recessions during a president's first term than in other periods. The...

The Decline of Activist Stabilization Policy: Natural Rate Misperceptions, Learning, and Expectations

John C. Williams, Athanasios Orphanides

We develop an estimated model of the U.S. economy in which agents form expectations by continually updating their beliefs regarding the behavior of the economy and monetary policy. We explore the...

Inflation Scares and Monetary Policy

John C. Williams, Athanasios Orphanides

Learning, expectations, inflation targeting, optimal control, credibility

The timing of stabilizations

Labor hoarding when unemployment is a worker discipline device

Inflation (Finance) ; Fiscal policy

Rational addiction with learning and regret

Labor supply ; Unemployment

Athanasios Orphanides, David Zervos

Consumer behavior

Optimal consumption dynamics with non-concave habit forming utility

Athanasios Orphanides, David Zervos

Consumption (Economics)

The empirical properties of a monetary aggregates that adds bond and stock funds to M2

Athanasios Orphanides, Brian Reid, David H. Small

Money supply

Taxation and intergenerational transfers with family size heterogeneity: do parents with more children prefer higher taxes?

Gregory D. Hess, Athanasios Orphanides

Taxation

Leverage as a state variable for employment, inventory accumulation, and fixed investment

Charles W. Calomiris, Athanasios Orphanides, Steven A. Sharpe

Employment (Economic theory) ; Inventories ; Financial leverage

Optimal reform postponement

Estimating the interest rate sensitivity of liquid retail deposit values

Inflation (Finance)

James O'Brien, Athanasios Orphanides, David Small

Bank deposits ; Interest rates

Inflation, volatility and growth

Ruth Judson, Athanasios Orphanides

This paper re-examines the relationship between inflation, inflation volatility and growth using cross-country panel data for the past 30 years. With regard to the level of inflation, we find that in...

Compensation incentives and risk taking behavior: evidence from mutual funds

The opportunistic approach to disinflation

This paper examines the role of compensation contracts in determining risk taking decisions by money managers in the financial industry. A methodology is developed for empirically testing and...

Athanasios Orphanides, David W. Wilcox

This paper explores the theoretical foundations of a new approach to monetary policy. Proponents of this approach hold that when inflation is moderate but still above the long-run objective, the Fed...

A quantitative exploration of the opportunistic approach to disinflation

Athanasios Orphanides, David H. Small, Volker Wieland, David W. Wilcox

A number of observers have advocated recently that the Federal Reserve take an ``opportunistic'' approach to the conduct of monetary policy. A hallmark of this approach is that the central bank...

Earnings forecasts and the predictability of stock returns: evidence from trading the S&P

Joel Lander, Athanasios Orphanides, Martha Douvogiannis

We develop a simple error-correction model, based on a well-known theory, espoused by Benjamin Graham and David Dodd and others, which presumes stock returns tend to restore an equilibrium...

Monetary policy rules based on real-time data

P* revisited: money-based inflation forecasts with a changing equilibrium velocity.

In recent years, simple policy rules have received attention as a means to a more transparent and effective monetary policy. Often, however, the analysis is based on unrealistic assumptions about the...

Athanasios Orphanides, Richard Porter

This paper implements recursive techniques to estimate the equilibrium level of M2 velocity and to forecast inflation using the P* model. The recursive estimates of equilibrium velocity are obtained...

Price stability and monetary policy effectiveness when nominal interest rates are bounded at zero

Monetary policy evaluation with noisy information

This paper employs stochastic simulations of a small structural rational expectations model to investigate the consequences of the zero bound constraint on nominal interest rates. We find that if the...

Yvan Lengwiler, Athanasios Orphanides

This paper investigates the implications of noisy information regarding the measurement of economic activity for the evaluation of monetary policy. A common implicit assumption in such evaluations is...

Optimal discretion

This paper investigates the desirability of adopting a rule in favor of discretionary monetary policy in a model exhibiting Kydland and Prescott's dynamic inconsistency problem. We deviate from...

The reliability of output gap estimates in real time

Errors in the measurement of the output gap and the design of monetary policy

Compared to its central role in policy discussions in the United States and most other developed countries, the reliability of the measurement of the output gap has attracted relatively little...

Athanasios Orphanides, Richard D. Porter, David Reifschneider, Robert Tetlow, Frederico Finan

We exploit data on historical revisions to real-time estimates of the output gap to examine the implications of measurement error for the design of monetary policy, using the Federal Reserve's model...

Efficient monetary policy design near price stability

Activist stabilization policy and inflation: the Taylor rule in the 1970s

We study the design of monetary policy in a low inflation environment taking into account the limitations imposed by the zero bound on nominal interest rates. Using numerical dynamic programming...

Monetary policy when the nominal short-term interest rate is zero

A number of recent studies have suggested that activist stabilization policy rules responding to inflation and the output gap can attain simultaneously a low and stable rate of inflation as well as a...

James Clouse, Dale Henderson, Athanasios Orphanides, David Small, Peter Tinsley

In an environment of low inflation, the Federal Reserve faces the risk that it has not provided enough monetary stimulus even when it has pushed the short-term nominal interest rate to its lower...

Monetary policy rules, macroeconomic stability and inflation: a view from the trenches

Imperfect knowledge, inflation expectations, and monetary policy

I estimate a forward-looking monetary policy reaction function for the Federal Reserve for the periods before and after Paul Volcker's appointment as Chairman in 1979, using information that was...

Robust monetary policy rules with unknown natural rates

This paper investigates the role of imperfect knowledge regarding the structure of the economy on the formation of expectations, macroeconomic dynamics, and the efficient formulation of monetary...

Historical monetary policy analysis and the Taylor rule

We examine the performance and robustness properties of alternative monetary policy rules in the presence of structural change that renders the natural rates of interest and unemployment uncertain....

The reliability of inflation forecasts based on output gap estimates in real time

This study examines the usefulness of the Taylor-rule framework as an organizing device for describing the policy debate and evolution of monetary policy in the United States. Monetary policy during...

The reform of October 1979: how it happened and why

A stable predictive relationship between inflation and the output gap, often referred to as a Phillips curve, provides the basis for countercyclical monetary policy in many models. In this paper, we...

David E. Lindsey, Athanasios Orphanides, Robert H. Rasche

This study offers a historical review of the monetary policy reform of October 6, 1979, and discusses the influences behind it and its significance. We lay out the record from the start of 1979...

Imperfect knowledge, inflation expectations, and monetary policy

Robust monetary policy rules with unknown natural rates

This paper investigates the role that imperfect knowledge about the structure of the economy plays in the formation of expectations, macroeconomic dynamics, and the efficient formulation of monetary...

Inflation scares and forecast-based monetary policy

We examine the performance and robustness properties of alternative monetary policy rules in the presence of structural change that renders the natural rates of interest and unemployment uncertain....

Inflation scares and forecast-based monetary policy

Central banks pay close attention to inflation expectations. In standard models, however, inflation expectations are tied down by the assumption of rational expectations and should be of little...

Inflation targeting under imperfect knowledge

Central banks pay close attention to inflation expectations. In standard models, however, inflation expectations are tied down by the assumption of rational expectations and should be of little...

The empirical properties of a monetary aggregate that adds bond and stock funds to M2

A central tenet of inflation targeting is that establishing and maintaining well-anchored inflation expectations are essential. In this paper, we reexamine the role of key elements of the inflation...

Athanasios Orphanides, Brian Reid, David H. Small

Money supply ; Mutual funds

Myopia and Addictive Behaviour.

Orphanides, Athanasios, Zervos, David

The authors present a theory of additive behavior that can account for addicts' apparent disregard for the future consequences of their current actions. The discounting of future utility is...

Taxation and Intergenerational Transfers with Family-Size Heterogeneity: Do Parents with More Children Prefer Higher Taxes?

Hess, Gregory D, Orphanides, Athanasios

Comment on the Conduct of Monetary Policy with a Shrinking Stock of Government Debt.

Economic conditions, elections, and the magnitude of foreign conflicts

Hess, Gregory D., Orphanides, Athanasios

A quantitative exploration of the opportunistic approach to disinflation

Aksoy, Yunus, Orphanides, Athanasios, Small, David, Wieland, Volker, Wilcox, David

Historical monetary policy analysis and the Taylor rule

Monetary policy evaluation with noisy information

The quest for prosperity without inflation

Lengwiler, Yvan, Orphanides, Athanasios

Optimal Discretion.

We investigate the desirability of adopting a rule in favor of discretionary monetary policy in a model exhibiting Kydland and Prescott's dynamic inconsistency problem but no fundamental...

Labor Hoarding When Unemployment Is a Worker Discipline Device.

The Opportunistic Approach to Disinflation.

Orphanides, Athanasios, Wilcox, David W

This paper explores the theoretical foundations of a new approach to monetary policy. Proponents of this approach hold that, when inflation is moderate but still above the long-run objective, the...

Inflation, Volatility and Growth.

Judson, Ruth, Orphanides, Athanasios

This paper re-examines the relationship between inflation, inflation volatility and growth, using cross-country panel data for the past 30 years. With regard to the level of inflation, we find that...

The timing of stabilizations

Monetary policy in deflation: the liquidity trap in history and practice

Erratum to "Monetary policy in deflation: the liquidity trap in history and practice" [North Am. J. Econ. Finance 15 (1) (2004) 101-124]

Robust Monetary Policy Rules with Unknown Natural Rates

Robust Monetary Policy Rules with Unknown Natural Rates

macroeconomics, Robust Monetary Policy Rules, Natural Rates

macroeconomics, Robust Monetary Policy Rules, Natural Rates

Price stability and monetary policy effectiveness when nominal interest rates are bounded at zero.

Günter Coenen, Athanasios Orphanides, Volker Wieland

This paper employs stochastic simulations of a small structural rational expectations model to investigate the consequences of the zero bound on nominal interest rates. We find that if the economy is...

The decline of activist stabilization policy: Natural rate misperceptions, learning and expectations.

The bond market term premium: what is it, and how can we measure it?

We develop an estimated model of the U.S. economy in which agents form expectations by continually updating their beliefs regarding the behavior of the economy and monetary policy. We explore the...

Don H Kim, Athanasios Orphanides

We review the concept of the term premium, examine alternative methods used to estimate it and discuss some of the challenges encountered in such efforts. We also explain how survey forecasts could...

War and Democracy

Hess, Gregory D., Orphanides, Athanasios

This paper presents a general equilibrium model of conflict based on a world populated by representative democracies. At the individual state level, when information regarding a leader's ability to...

Economic Projections and Rules-of-Thumb for Monetary Policy

Orphanides, Athanasios, Wieland, Volker

Monetary policy analysts often rely on rules-of-thumb, such as the Taylor rule, to describe historical monetary policy decisions and to compare current policy to historical norms. Analysis along...

The Reliability of Output Gap Estimates in Real Time

Athanasios Orphanides, Simon Van_Norden

Compared to its central role in policy discussions in the United States and most other developed countries, the reliability of the measurement of the output gap has attracted relatively little...

Monetary-Policy Rules and the Great Inflation

Monetary Policy Rules Based on Real-Time Data

Efficient Monetary Policy Design near Price Stability

This paper examines the magnitude of informational problems associated with the implementation and interpretation of simple monetary policy rules. Using Taylor's rule as an example, I demonstrate...

Orphanides, Athanasios, Wieland, Volker

P revisited: money-based inflation forecasts with a changing equilibrium velocity

Orphanides, Athanasios, Porter, Richard D.

Errors in the measurement of the output gap and the design of monetary policy

Orphanides, Athanasios, Porter, Richard D., Reifschneider, David, Tetlow, Robert, Finan, Frederico

Inflation zone targeting

Orphanides, Athanasios, Wieland, Volker

Optimal reform postponement

Optimal consumption dynamics with non-concave habit-forming utility

Orphanides, Athanasios, Zervos, David

Price Stability and Monetary Policy Effectiveness when Nominal Interest Rates are Bounded at Zero

Coenen, Günter, Orphanides, Athanasios, Wieland, Volker

This Paper employs stochastic simulations of a small structural rational expectations model to investigate the consequences of the zero bound on nominal interest rates. We find that if the economy is...

The Decline of Activist Stabilization Policy: Natural Rate Misperceptions, Learning and Expectations

Orphanides, Athanasios, Williams, John C

We develop an estimated model of the US economy in which agents form expectations by continually updating their beliefs regarding the behaviour of the economy and monetary policy. We explore the...

The Reliability of Output Gap Estimates in Real Time

Jon Faust, Athanasios Orphanides, David L. Reifschneider

Compared to its central role in policy discussions in the United States and most other developed countries, the reliability of the measurement of the output gap has attracted relatively little...

Introduction

Monetary policy ; Econometric models ; Uncertainty ; Economics - Study and teaching

An investigation into the magnitude of foreign conflicts

Gregory D. Hess, Athanasios Orphanides

Recessions ; Business cycles ; War - Economic aspects

The decline of activist stabilization policy: natural rate misperceptions, learning, and expectations

Estimating the interest rate sensitivity of liquid retail deposit values

We develop an estimated model of the U.S. economy in which agents form expectations by continually updating their beliefs regarding the behavior of the economy and monetary policy. We explore the...

James O'Brien, Athanasios Orphanides, David Small

Bank deposits ; Interest rates

Expectations, open market operations, and changes in the federal funds rate (commentary)

The reform of October 1979: how it happened and why

Open market operations ; Federal funds rate ; Rational expectations (Economic theory)

David E. Lindsey, Athanasios Orphanides, Robert H. Rasche

This study offers a historical review of the monetary policy reform of October 6, 1979, and discusses the influences behind it and its significance. We lay out the record from the start of 1979...

Summary of papers presented at the conference "models and monetary policy: research in the tradition of Dale Henderson, Richard Porter, and Peter Tinsley"

Jon Faust, Athanasios Orphanides, David L. Reifschneider

On March 26 and 27, 2004, the Federal Reserve Board held a conference in Washington, D.C., on the application of economic models to the analysis of monetary policy issues. The papers presented at the...

The Quest for Prosperity Without Inflation

A Quantitative Exploration of the Opportunistic Approach to Disinflation

In recent years, activist monetary policy rules responding to inflation and the level of economic activity have been advanced as a means of achieving effective output stabilization without inflation....

Aksoy, Yunus, Orphanides, Athanasios, Small, David, Wieland, Volker, Wilcox, David

This Paper explores the quantitative implications of an approach to monetary policy that gained prominence in the United States during the 1990s. Proponents of this approach recommend that, when...

The Reform of October 1979: How it Happened and Why

Lindsey, David E, Orphanides, Athanasios, Rasche, Robert H

This study offers a historical review of the monetary policy reform of October 6, 1979, and discusses the influences behind it and its significance. We lay out the record from the start of 1979...

The Reliability of Inflation Forecasts Based on Output Gap Estimates in Real Time

The Macroeconomic Consequences of Terrorism

A stable predictive relationship between inflation and the output gap, often referred to as a Phillips curve, provides the basis for countercyclical monetary policy in many models. In this paper, we...

S. Brock Blomberg, Gregory D. Hess, Athanasios Orphanides

We perform an empirical investigation of the macroeconomic consequences of international terrorism and interactions with alternative forms of collective violence. Our analysis is based on a rich...

Monetary Policy with Imperfect Knowledge

The Unreliability of Output-Gap Estimates in Real Time

We examine the performance and robustness of monetary policy rules when the central bank and the public have imperfect knowledge of the economy and continuously update their estimates of model...

Monetary Policy When the Nominal Short-Term Interest Rate is Zero

We examine the reliability of alternative output detrending methods, with special attention to the accuracy of real-time estimates of the output gap. We show that ex post revisions of the estimated...

James Clouse, Dale Henderson, Athanasios Orphanides, David Small, P.A. Tinsley

In an environment of low inflation, the Federal Reserve faces the possibility that it may not have provided enough monetary stimulus even though it had pushed the short-term nominal interest rate to...

Imperfect Central Bank Communication - Information versus Distraction.

PÃ¤r Ã–sterholm, Spencer Dale, Athanasios Orphanides

Much of the information communicated by central banks is noisy or imperfect. This paper considers the potential benefits and limitations of central bank communications in a model of imperfect...

Price Stability and Monetary Policy Effectiveness when Nominal Interest Rates are Bounded at Zero

GÃ¼nter Coenen, Athanasios Orphanides, Volker Wieland

This paper employs stochastic simulations of a small structural rational expectations model to investigate the consequences of the zero bound on nominal interest rates. We find that if the economy is...

Imperfect knowledge and the pitfalls of optimal control monetary policy

Economic projections and rules of thumb for monetary policy

This paper examines the robustness characteristics of optimal control policies derived under the assumption of rational expectations to alternative models of expectations formation and uncertainty...

Learning, expectations formation and the pitfalls of optimal control monetary policy

Monetary policy analysts often rely on rules of thumb, such as the Taylor rule, to describe historical monetary policy decisions and to compare current policy with historical norms. Analysis along...

LEARNING, EXPECTATIONS FORMATION, AND THE PITFALLS OF OPTIMAL CONTROL MONETARY POLICY

This paper examines the robustness characteristics of optimal control policies derived under the assumption of rational expectations to alternative models of expectations. We assume that agents have...

Imperfect Knowledge, Inflation Expectations, and Monetary Policy

This paper examines the robustness characteristics of optimal control policies derived un- der the assumption of rational expectations to alternative models of expectations. We assume that agents...

The Unreliability of Output Gap Estimates in Real Time

This paper investigates the role that imperfect knowledge about the structure of the economy plays in the formation of expectations, macroeconomic dynamics, and the efficient formulation of monetary...

The Reliability of Inflation Forecasts Based on Output Gap Estimates in Real Time

We examine the reliability of alternative output detrending methods, with special attention to the accuracy of real-time estimates of the output gap. We show that ex post revisions of the estimated...

Imperfect Knowledge And The Pitfalls Of Optimal Control Monetary Policy

A stable predictive relationship between inflation and the output gap, often referred to as a Phillips curve, provides the basis for empirical formulations of countercyclical monetary policy in many...

Uncertainty and disagreement in economic forecasting

This paper examines the robustness characteristics of optimal control policies derived under the assumption of rational expectations to alternative models of expectations formation and uncertainty...

Stefania D'Amico, Athanasios Orphanides

Using the probabilistic responses from the Survey of Professional Forecasters, we study the evolution of uncertainty and disagreement associated with inflation forecasts in the United States since...

Imperfect Knowledge and the Pitfalls of Optimal Control Monetary Policy

Imperfect Central Bank Communication: Information versus Distraction

This paper examines the robustness characteristics of optimal control policies derived under the assumption of rational expectations to alternative models of expectations formation and uncertainty...

Spencer Dale, Athanasios Orphanides, Par Osterholm

Much of the information communicated by central banks is noisy or imperfect. This paper considers the potential benefits and limitations of central bank communications in a model of imperfect...

Learning, Expectations Formation, and the Pitfalls of Optimal Control Monetary Policy

Learning, expectations formation, and the pitfalls of optimal control monetary policy

This paper examines the robustness characteristics of optimal control policies derived under the assumption of rational expectations to alternative models of expectations. We assume that agents have...

Economic Projections and Rules-of-Thumb for Monetary Policy

The optimal control approach to monetary policy has garnered increased attention in recent years. Optimal control policies, however, are designed for the specific features of a particular model and...