In the past, policymakers occasionally became aware of a recession only well after it began. Can they do better? Plot the probability of a recession from a statistical model (FRED code: RECPROUSM156N). To what extent could the model help improve monetary or fiscal policy or both?
Answer to relevant QuestionsIf offered the choice of receiving $1,000 today or $1,000 in one year’s time, which option would you choose, and why?Compare the frequency and timing of recessions in key European economies since 1960. Make separate bar charts for Germany (FRED code: DEURECM), Italy (FRED code: ITARECM), and Spain (FRED code: ESPRECM). Do their business ...When monetary policymakers hit the zero nominal-interest-rate bound with their policy rate, they have the option to turn to unconventional tools of monetary policy. How do these unconventional tools work, and why are ...Suppose the policy interest rate controlled by the central bank and the inflation rate were both zero. Explain in terms of the aggregate demand-aggregate supply framework how the economy could fall into a deflationary ...Compare the impact of a given change in monetary policy in two economies that are similar in every way except that, in Economy A, the financial system has a large shadow banking system providing many alternatives to bank ...
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