WEBINAR: A Quantitative Model for the Integrated Policy Framework

Event Code :WB482020
Venue :Online Webinar
Host Name :The SEACEN Centre
Coordinator :
Date From :20 Aug 2020
Date To :20 Aug 2020


Jesper Linde will be presenting the attached paper for an MMPM Seminar/Webinar series on August 20th at 3 pm: “A Quantitative Model for the Integrated Policy Framework” (joint with Tobias Adrian ; Christopher J. Erceg ; Jesper Lindé ; Pawel Zabczyk ; Jianping Zhou).

Abstract of the paper:
Many central banks have relied on a range of policy tools, including foreign exchange intervention (FXI) and capital flow management tools (CFMs), to mitigate the effects of volatile capital flows on their economies. We develop an empirically-oriented New Keynesian model to evaluate and quantify how using multiple policy tools can potentially improve monetary policy tradeoffs. Our model embeds nonlinear balance sheet channels and includes a range of empirically-relevant frictions. We show that FXI and CFMs may improve policy tradeoffs under certain conditions, especially for economies with less well-anchored inflation expectations, substantial foreign currency mismatch, and that are more vulnerable to shocks likely to induce capital outflows and exchange rate pressures.

Link to the paper is here.