Reforming the State-Based Forward Guidance through Wage Growth Rate Threshold: Evidence from FRB/US Simulations

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Tác giả: Sudiksha Joshi

Ngôn ngữ: eng

Ký hiệu phân loại: 332.46 Monetary policy

Thông tin xuất bản: 2020

Mô tả vật lý:

Bộ sưu tập: Báo, Tạp chí

ID: 165054

Comment: 48 pages, 20 figures, 4 tablesI have analyzed the practicality of the Evans Rule in the state based forward guidance and possible ways to reform it. I examined the biases, measurement errors, and other limitations extant in the unemployment and the inflation rate in the Evans Rule. Using time series analysis, I calibrated the thresholds of ECI wage growth and the employment to population ratio and investigated the relationship between other labor utilization variables. Then I imposed various shocks and constructed impulse response functions to contrast the paths of eight macroeconomic variables under three scenarios. The results suggest that under the wage growth rate scenario, the federal funds rate lift off earlier than under the current Evans Rule.
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