Haku
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Expectations, stagnation and fiscal policy
(11.08.2016)
Bank of Finland Research Discussion Papers 25/2016
Bank of Finland Research Discussion Papers 25/2016
Stagnation as the new norm and fiscal policy are examined in a New Keynesian model with adaptive learning determining expectations. We impose inflation and consumption lower bounds, which can be relevant when agents are ...
Price level targeting with evolving credibility
(23.02.2018)
Bank of Finland Research Discussion Papers 5/2018
Bank of Finland Research Discussion Papers 5/2018
We examine global dynamics under learning in a nonlinear New Keynesian model when monetary policy uses price-level targeting and compare it to inflation targeting. Domain of attraction of the targeted steady state gives a ...
Learning from financial crisis: the experience of Nordic banks
(09.12.2016)
Bank of Finland Research Discussion Papers 30/2016
Bank of Finland Research Discussion Papers 30/2016
To study whether banks retain their lessons from the experience of a severe financial crisis, we examine the effects of the systemic banking crisis of the early 1990s in three Nordic countries (Finland, Norway, and Sweden). ...
On robustness of average inflation targeting
(21.04.2021)
Bank of Finland Research Discussion Papers 6/2021
Bank of Finland Research Discussion Papers 6/2021
This paper considers the performance of average inflation targeting (AIT) policy in a New Keynesian model with adaptive learning agents. Our analysis raises concerns regarding robustness of AIT when agents have imperfect ...
Forward guidance with unanchored expectations
(31.08.2021)
Bank of Finland Research Discussion Papers 11/2021
Bank of Finland Research Discussion Papers 11/2021
We study zero interest-rate policy in response to a large negative demand shock when long-run expectations can fall over time. Because falling expectations make monetary policy less effective by raising real interest rates, ...
Does my model predict a forward guidance puzzle?
(10.09.2019)
Bank of Finland Research Discussion Papers 19/2019
Bank of Finland Research Discussion Papers 19/2019
We provide suffcient conditions for when a rational expectations structural model predicts bounded responses of endogenous variables to forward guidance announcements. The conditions coincide with a special case of the ...