Community Knowledge
Notes, derivations and notebooks that members chose to publish. Keep your own base private, share by link, or publish here.
Courses
All courses →Fiscal Policy and Public Debt
Debt dynamics and the r minus g arithmetic, sustainability tests, fiscal multipliers, optimal debt, monetary-fiscal interaction and the fiscal theory of the price level, the euro-area crisis, fiscal rules including the Swiss debt brake, and the decade after 2020. Eight lessons with flashcards and references.
Inflation Targeting and Expectations
Why the target is 2 percent, what it means for expectations to be anchored, how expectations are measured, why the Phillips curve flattened and then steepened, what credibility buys in a disinflation, how central banks talk, and what 2021–2023 tested. Eight lessons with sources and flashcards.
Unconventional Monetary Policy
What central banks did when the policy rate hit zero: forward guidance, asset purchases, negative rates, yield curve control, and the long exit. Eight lessons with the evidence, the mechanics of the balance sheet, and flashcards.
Monetary Policy Rules and the Policy Stance
From Taylor's 1993 rule to the natural rate of interest and the question every central-bank watcher asks: is policy tight or loose? Eight lessons with the original sources, the equations, and flashcards.
Latest published
Asset purchases: evidence
Event studies, term-premium decompositions, macro estimates, and why central bank researchers find larger effects than academics.
Asset purchases: channels
How buying bonds with reserves can lower long rates: portfolio balance, signalling, liquidity, and what the programmes of the Fed, ECB and Bank of Japan looked like.
Forward guidance
Delphic versus Odyssean guidance, the Fed's calendar and threshold promises, and the puzzle that models predict effects far larger than the data show.
The effective lower bound
Why the policy rate cannot fall much below zero, why that matters more when the natural rate is low, and what a liquidity trap does to the usual policy logic.
Rules in practice: Fed, ECB and SNB
How three central banks describe their own frameworks, how they use rules without following them, and how to compute a prescription yourself.
Real-time data and the Taylor rule
Orphanides' finding that the data available at the time change the verdict on the 1970s, and what it means for judging policy today.
Measuring the policy stance
Real rate gaps, shadow rates at the lower bound, and financial conditions: three ways to answer "is policy tight?"
The natural rate of interest
Wicksell's idea, the Laubach–Williams estimate, and why a number nobody can observe decides whether policy is tight.
Variants of the Taylor rule
Balanced-approach, inertial, forward-looking and first-difference rules, and the five rules the Fed publishes twice a year.
The Taylor principle and determinacy
Why the coefficient on inflation has to exceed one, shown in the three-equation New Keynesian model.
The Taylor rule
Taylor's 1993 formula, what each term means, and why a simple rule described Fed policy so well.
Why rules? Time inconsistency and the case for commitment
Why a central bank that is free to do the best thing each period can end up with higher inflation and nothing to show for it.