E4 - Money and Interest Rates

• The Distributional Effects of Conventional Monetary Policy and Quantitative Easing: Evidence from an Estimated DSGE Model

  Staff Working Paper 2019-6 Stefan Hohberger, Romanos Priftis, Lukas Vogel

  This paper compares the distributional effects of conventional monetary policy and quantitative easing (QE) within an estimated open-economy DSGE model of the euro area.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Interest rates, Monetary policy, Monetary policy transmission JEL Code(s): E, E4, E44, E5, E52, F, F4, F41

• Corporate Debt Composition and Business Cycles

  Staff Working Paper 2019-5 Jelena Zivanovic

  Based on empirical evidence, I propose a dynamic stochastic general equilibrium model with two financial sectors to analyze the role of corporate debt composition (bank versus bond financing) in the transmission of economic shocks.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Financial institutions, Financial markets, Recent economic and financial developments JEL Code(s): E, E3, E32, E4, E44

• Frictional Capital Reallocation I: Ex Ante Heterogeneity

  Staff Working Paper 2019-4 Randall Wright, Sylvia Xiaolin Xiao, Yu Zhu

  This paper studies dynamic general equilibrium models where firms trade capital in frictional markets. Gains from trade arise due to ex ante heterogeneity: some firms are better at investment, so they build capital in the primary market; others acquire it in the secondary market.

  Content Type(s): Staff research, Staff working papers Topic(s): Monetary policy JEL Code(s): E, E2, E22, E4, E44

• The Secular Decline of Forecasted Interest Rates

  Staff Analytical Note 2019-1 Bruno Feunou, Jean-Sébastien Fontaine

  Canadian interest rates show a secular decline since the 1980s. Long-term survey-based forecasts of interest rates also declined, but less so and were more gradual. Our model-based estimates show an endpoint shifting over time in three phases: a decline between 1990 and 1995, a period of stability between 1996 and 2007, and a further decline since 2008. The current endpoint estimate remains clouded with uncertainty; this is an active area of research.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Financial markets, Interest rates JEL Code(s): E, E4, E43, G, G1, G12