Comments, Discussions, and Debate

Kommentarer till ESO-rapporten 2022:3, “Samspel för stabilitet – en ESO-rapport om rollfördelningen mellanfinans- och penningpolitiken“. Bilder pdfpowerpoint.

Comments on Merten and Williams, ‘Tying Down the Anchor: Monetary Policy Rules and the Lower Bound on Interest Rates’,” given at the SNB Research Conference, Zurich, September 20–21, 2019.

Amorteringskraven: Felaktiga grunder och negativa effekter [Amortization Requirements: Wrong Reasons and Negative Effects],” report to the Stockholm Chamber of Commerce, May 2019.

Comment on “Rules versus Discretion: A Reconsideration,” by Narayana Kocherlakota, Brookings Papers on Economic Activity, Fall 2016, 41-48.

Discussion (slides) of Filardo and Rungcharoenkitkul, “Quantitative case for leaning-against-the-wind,” CCBS Research Forum on Macro Finance, Bank of England, London, May 26-27, 2016.

Discussion of Ajello, Laubach, López-Salido, and Nakata, “Financial stability and optimal interest-rate policy,” a second discussion (slides) of the paper “Financial Stability and Optimal Interest-Rate Policy” by Andrea Ajello, Thomas Laubach, David López-Salido, and Taisuke Nakata, Federal Reserve Board, at the conference “Monetary Policy Lessons from the Financial Crisis,” Swiss National Bank Research Conference, September 24-26, 2015.
A previous (and different) discussion of this paper is here.

Discussion (text) of “Inflation targeting does not anchor inflation expectations: Evidence from firms in New Zeland” by Saten Kumar, Hassan Afrouzi, Olivier Coibion, and Yuriy Gorodnichenko at the Fall 2015 Brookings Panel on Economic Activity, Washington, DC, September 10-11, 2015. Brookings Papers on Economic Activity, Fall 2015, 212-219.

How best to manage a housing boom: Interview by IMF Survey,” interview, June 15, 2015.
– Monetary policy is not suitable for managing housing booms and rising household debt
– Not all housing booms pose a problem
– Identifying problem cases requires deep and complex analysis

Negative Interest Rates: Helpful or Harmful?” Interview in Top of Mind, Issue 32, February 27, 2015, Goldman Sachs.

Felaktig beskrivning av debatten om bostadspriserna, skulderna och penningpolitiken” (“Erroneous description of the debate about housing prices, debt, and monetary policy,” in Swedish), Ekonomisk Debatt 1/2015, 49-51.

Penningpolitik och full sysselsättning” (“Monetary Policy and Full Employment”, in Swedish), report to LO, The Swedish Trade Union Confederation, December 2014.

Comments on Cieslak, Morse, and Vissing-Jorgensen, “Stock Returns over the FOMC Cycle,” at The NBER 25th Annual East Asian Seminar on Economics Unconventional Monetary Policy Tokyo, June 20-21, 2014.

Comments on Bordo and Siklos “Central Bank Credibility: An Historical and Quantitative Exploration,” at Norges Bank Conference “Of the Uses of Central Banks: Lessons from History,” Oslo, June 5-6, 2014.

Riksbanken, måluppfyllelsen och den demokratiska kontrollen” (“The Riksbank, the target achievement, and the democratic control,” in Swedish), Ekonomisk Debatt 4/2014, 54-66.

De senaste årens penningpolitik – ‘leaning against the wind’ ” (“Monetary policy during the last few years – leaning against the wind,” in Swedish), Ekonomisk Debatt 3/2014, 6-24.

“Comment on Chung, Herbst, and Kiley, ‘Effective Monetary Policy Strategies in New Keynesian Models: A Re-examination’,” NBER Macro Annual 2014, forthcoming. PDF.

Monetary policy and financial-stability policy are different and normally best conducted independently,” in Monetary Policy in a Changing Financial Landscape, ECB Forum on Central Banking, Sintra, Portugal, May 25-27, 2014, page 81-89.

“How to weigh unemployment relative to inflation in monetary policy?”, panel discussion at Fulfilling the Full Employment Mandate, the 57th Economic Conference at the Federal Reserve Bank of Boston, April 12-13, 2013. Journal of Money, Credit and Banking, forthcoming. PDF.

“Discussion of Athanasios Orphanides and Volker Wieland ‘Complexity and Monetary Policy’,” International Journal of Central Banking 9, Supplement 1 (2013) 205-218.PDF

“Comment on Olivier Jeanne, ‘Capital Account Policies and the Real Exchange Rate’,” in Giavazzi, Francesco, and Kenneth D. West (eds.), International Seminar on Macroeconomics 2012, National Bureau of Economic Research, University of Chicago Press, 2013, 49-54.

“Comment on Michael Woodford, ‘Inflation Targeting and Financial Stability’,” Sveriges Riksbank Economic Review 2012:1, 33-39. PDF.

“Comments on Gerlach, Stefan, and Thomas Jordan, ‘Tactics and Strategy in Monetary Policy: Benjamin Friedman’s Thinking and the Swiss National Bank’,” given at Recent Developments in Monetary Policy, Fiscal Policy, and Financial System Design: A Conference Honoring Benjamin M. Friedman, Federal Reserve Bank of Boston, April 22-23, 2011. PDF.

“Comments on Chung, Laforte, Reifschneider, and Williams, ‘Have We Underestimated the Likelihood and Severity of Zero Lower Bound Events?’ at the conference “Monetary Policy at the Zero Lower Bound,” Federal Reserve Bank of San Francisco, February 25, 2011, slides.

“Discussion of Hansen and Sargent, ‘Robust Control and Filtering of Forward-Looking Models’,” Conference on “Monetary Policy under Incomplete Information,” Gerzensee, Switzerland, October 12–14, 2000, slides.

“Comments on Marvin Goodfriend and Robert G. King, ‘The Great Inflation Drift’,” The Great Inflation Conference, Woodstock, VT, September 25-27, 2008, PDFSlides.

“Comments on Dale, Orphanides, and Österholm, ‘Imperfect Central Bank Communication: Information versus Distraction,” SNB Research Conference, September 19-20, 2008,slides.

The line: The paper’s argument against publishing central-bank forecasts requires the unlikely combination of (1) the central-bank forecast being much worse than the private-sector forecast and (2) the private-sector incorrectly believing the central-bank forecast is much better.

Discussion of Roel Beetsma, “A Survey of the Effects of Discretionary Fiscal Policy,” presented at the conference on “Fiscal Policy and Labour Market Reforms” in Stockholm, January 29, 2008, slides.

“Inflation Targeting,” May 2007, in The New Palgrave Dictionary of Economics, 2nd edition, edited by Larry Blum and Steven Durlauf, PDF.

The line: Inflation targeting was introduced in New Zealand in 1990; has been very successful in terms of stabilizing both inflation and the real economy; has as of 2007 had been adopted by more than 20 industrialized and non-industrialized countries; and is characterized by an announced numerical inflation target, an implementation of monetary policy that gives a major role to an inflation forecast and has been called ‘inflation-forecast targeting’, and a high degree of transparency and accountability.

“Optimization under Commitment and Discretion, the Recursive Saddlepoint Method, and Targeting Rules and Instrument Rules: Lecture Notes,” March 2010, PDF.

The line: Solutions to the stochastic linear-quadratic problem with forward-looking variables under commitment and discretion, now with the practical recursive saddlepoint method of Marcet and Marimon, and compact definitions of instrument rules and targeting rules.

“Comment on Jeffrey Frankel, ‘Commodity Prices and Monetary Policy’,” in Campbell, John Y. (ed.), Asset Prices and Monetary Policy, University of Chicago Press, 2008, PDF.

“Monetary-Policy Challenges: Monetary-Policy Responses to Oil-Price Changes,” presented at the meeting of the Bellagio Group of the G10, held at the Federal Reserve Board, Washington, DC, January 13-14, 2006, PDF.

The line: Central banks should respond to oil prices to the extent these impact forecasts of inflation and the output gap, and because this impact is complex, the response will be be complex and cannot be represented by a simple instrument rule.

“The Riksbank Should Learn from Norway” (in Swedish), interview in Dagens Industri, January 14, 2006, PDF.

“Comments on ‘Grading the Federal Open Market Committee’s Communications’ by Vincent Reinhart and Brian Sack,” presented at the ASSA meeting in Boston, January 7, 2006,slides.

“Discussion of Faruqee, Laxton, Muir, and Pesenti, ‘Smooth Landing or Crash? Model-based Scenarios of Global Current Account Rebalancing’,” presented at the NBER Conference on G7 Current Account Imbalances, Newport, RI, June 2005; to be published in Clarida, Richard, editor, G7 Current Account Imbalances: Sustainability and Adjustment, University of Chicago Press, forthcoming, PDF.

The line: Impressive paper and model, but the authors do not fully utilize the model’s potential to a synthesis of and an improvement on recent papers on the US current account.

“Monetary Policy and Central Bank Communication,” presentation at the conference “ECB and Its Watchers,” Frankfurt, June 3, 2005, PDF.

“Comment on Brock and Durlauf, ‘Local Robustness Analysis: Theory and Applications’,” AEA Meeting, Philadelphia, January 2005, overhead slides.

The line: Brock and Durlauf (2004) provides an elegant and compact analysis in the frequency domain of local robust control, but there are many limitations of their method, which makes it less practical.

“Comments on Bernanke, Reinhart, and Sack, ‘An Empirical Assessment of Monetary Policy Alternatives at the Zero Bound’,” Brookings Papers on Economic Activity 2004:2, 84-100. PDFAbstract.

The line: The Bernanke-Reinhart-Sack paper mostly focuses on alternative policies in a liquidity trap to affect expectations of future interest rates. But the problem in a liquidity trap is rather to raise private-sector expectations of the future price level.

“Targeting Rules vs. Instrument Rules for Monetary Policy: What Is Wrong with McCallum and Nelson?” Federal Reserve Bank of St. Louis Review 87 (2005) 613-626, PDF.Abstract.

The line: A response to McCallum and Nelson’s (2005) paper “Targeting Rules vs. Instrument Rules for Monetary Policy,” which criticizes my JEL 2003 article “What Is Wrong with Taylor Rules? Using Judgment in Monetary Policy through Targeting Rules.”

Comments on Mishkin, Frederic M., “Can Inflation Targeting Work in Emerging Market Countries,” Festschrift in Honor of Guillermo A. Calvo, IMF, Washington, DC, April 15 and 16, 2004, overhead slides.

“Flexible Inflation Targeting: Principles and Possible Improvements,” seminar at Norges Bank (Bank of Norway), Oslo, on March 25, 2004 (shorter version presented at Conference on Monetary Policy, Norges Bank, March 26, 2004), overhead slides.

“Reviews of Monetary Policy in New Zealand and Norway,” Newsletter, July 2004, Study Center Gerzensee, Gerzensee, Switzerland. PDF.

“Challenges for Monetary Policy,” presented at the meeting of the Bellagio Group of the G10, held at the National Bank of Belgium, Brussels, January 26-27, 2004, PDF.

“Interview: Lars Svensson,” interview in Central Banking, Vol. XIV, No. 2, November 2003, 51-59, PDF.

“Commentary” (on Laurence H. Meyer, “Practical Problems and Obstacles to Inflation Targeting”), Federal Reserve Bank of St. Louis Review 84(4) (July/August 2004) 161-164,PDF.

“Monetary Policy and Learning,” Federal Reserve Bank of Atlanta Economic Review, Third Quarter 2003, 11-16, PDF.

Briefing papers for the Committee on Economic and Monetary Affairs (ECON) of the European Parliament for the Dialogue with ECB.

  • “Oil Prices and ECB Monetary Policy,” January 2005, PDF.
    The line: Oil price movements have complex effects on the inflation and output-gap forecasts that should guide ECB monetary policy, and an evaluation of whether the ECB has responded appropriately to past oil-price movements is a somewhat demanding exercise.
  • “Asset Prices and ECB Monetary Policy,” April 2004, PDF.
  • “The Euro Appreciation and ECB Monetary Policy,” February 2004, PDF.
  • “The Risks of Deflation and the Effectiveness of Monetary Policy in the Euro Area,” August 2003, PDF.
  • “In the Right Direction, But Not Enough: The Modification of the Monetary-Policy Strategy of the ECB,” May 2003, PDF .
  • “How Should the Eurosystem Reform Its Monetary Strategy?” February 2003, PDF .
  • “A Good Thing Could Happen at the ECB: An Improvement of the Eurosystem’s Definition of Price Stability,” September 2002, PDF.
  • “A Reform of the Eurosystem’s Monetary-Policy Strategy Is Increasingly Urgent,” May 2002, PDF.
  • “Sweden and the Euro,” January 2002, PDF.
  • “The Fed Does Not Provide the Solution to the Eurosystem’s Problems,” May 2001, PDF.
  • “What is Good and What is Bad with the Eurosystem’s Published Forecasts, and How Can They Be Improved?” February 2001, PDF.
  • “What is Wrong with the Eurosystem’s Money-Growth Indicator, and What Should the Eurosystem Do about It?” November 2000, PDF.
  • “Forward-Looking Monetary Policy, Leading Indicators, and the Riksbank’s Inflation Report vs. the ECB’s Monthly Bulletin,” September 2000, PDF.
  • “Monetary Policy and the Current Economic and Monetary Situation,” June 2000, PDF.

Discussion of Francesco Lippi and Stefano Neri, “Information Variables for Monetary Policy in a Small Structural Model of the Euro Area,” Workshop on  Small Structural Models for Monetary Policy Analysis: Progress, Puzzles, and Opportunities, Sveriges Riksbank, Stockholm, June 6-7, 2003, overhead slides.

“Sverige, valutaunionen och penningpolitiken” (“Sweden, the EMU, and Monetary Policy,” in Swedish), Ekonomisk Debatt 31(4) (2003) 50-52, PDF. (The piece is a translation and extension of “Sweden and the Euro,” January 2002.)

“Comment on Jeffery D. Amato and Hyun Song Shin, ‘Public and Private Information in Monetary Policy Models’,” revised June 2003, presented at the conference “Monetary Stability, Financial Stability and the Business Cycle,” BIS, Basel, Mar 28-29, 2003, PDF.

“Comment on Edward Nelson, ‘The Future of Monetary Aggregates in Monetary Policy Analysis’,” Carnegie-Rochester Conference on Public Policy, Pittsburgh, PA, Nov 22-23, 2002, Journal of Monetary Economics 50 (2003) 1061-1070, PDF.

Discussion of Alan J. Auerbach and Maurice Obstfeld, “The Case for Open-Market Purchases in a Liquidity Trap,” FRBSF and SIEPR Conference on Finance and Macroeconomics, San Francisco, Feb 28-Mar 1, 2003, overhead slides.

Discussion of Guenther W. Beck and Volker Wieland, “Learning, Stabilization and Credibility: Optimal Monetary Policy in a Changing Economy,” AEA Annual Meeting, Washington, Jan 4, 2003, overhead slides.

Discussion of Frank Smets and Raf Wouters, “Output Gaps: Theory versus Practice,” AEA Annual Meeting, Washington, Jan 4, 2003, overhead slides.

Discussion of George W. Evans and Seppo Honkapohja, “Monetary Policy, Expectations and Commitment,” AEA Annual Meeting, Washington, Jan 5, 2003, overhead slides.

Talk at the Hong Kong Institute for Monetary Research, Hong Kong Monetary Authority, “Escaping from Deflation and a Liquidity Trap,” Dec 17, 2002, overhead slides.

Discussion of Maurice Obstfeld, Jay C. Shambaugh and Alan M. Taylor, “The Trilemma in History: Tradeoffs amonge Exchange Rates, Monetary Policies, and Capital Mobility,” NBER International Finance and Macro Program Meeting, Cambridge, MA, Oct 18, 2002, overhead slides (3.2 MB).

Discussion of Vitor Gaspar and Frank Smets, “Monetary Policy, Price Stability and Output Gap Stabilization,” and Justin Wolfers, “Is Business Cycle Volatility Costly? Evidence from Surveys of Subjective Wellbeing,” at the conference “Stabilizing the Economy: What Roles for Fiscal and Monetary Policy?,” July 11, 2002, New York, PDF.

“Possible Improvements of the Eurosystem’s Monetary Policy Regime,” talk at the Nordic Central Bank Meeting, Mariehamn, Åland, June 25, 2002, overhead slides.

“Comments on Nancy Stokey, ‘Rules and Discretion’ after Twenty-Five Years,” NBER Macroeconomics Annual 2002, 54-62. PDF.

Discussion of Sebastian Edwards and Igal Magendzo, “A Currency of One’s Own? An Empirical Invistigation on Dollarization and Independent Currency Unions,” at the Sveriges Riksbank and IIES Conference on Monetary Policy and Financial Markets in an Enlarged EU, Stockholm, May 17-18, 2002, overhead slides.

Discussion of Frank Smets and Rafael Wouters, “Monetary Policy in an Estimated SDGE Model of the Euro Area,” at the conference “Macroeconomic Models for Monetary Policy,” Federal Reserve Bank of San Francisco, Mar 1-2, 2002, overhead slides.

Bordering on Abuse,” interview (in Swedish) in Dagens Industri, February 15, 2002, on the Riksbank’s Governing Board’s plan to obey, against the Executive Board’s recommendation, the Government’s request to hand over 20 bn kronor ($2 bn) of the Riksbank’s capital to the Government in order to contribute to the Government’s budget.

Discusson of Athanasios Orphanides and John C. Williams, “Imperfect Knowledge, Inflation Expectations, and Monetary Policy,” Econometric Society North American Winter Meeting, Atlanta, Jan 4-6, 2002, overhead slides.

Discussion of Thomas Laubach and John C. Williams, “Measuring the Natural Interest Rate,” American Economic Association Annual Meeting, Atlanta, Jan 4-6, 2002, overhead slides.

Comment on Michael Woodford, “Imperfect Common Knowledge and the Effects of Monetary Policy,” in Philippe Aghion, Roman Frydman, Joseph Stiglitz and Michael Woodford, eds., Knowledge, Information and Expectations in Modern Macroeconomics: In Honor of Edmund S. Phelps, Princeton University Press, 2003, 59-63, PDF.

How Japan Can Recover,” Financial Times, Sep 25, 2001.

Discussion of Calvo, Celasun and Kumhof, “A Theory of Rational Inflation Inertia,” IFM  Workshop, NBER Summer Institute, July 16, 2001, overhead slides.

“Two and a Half Years of the Eurosystem,” presented at the CFS Research Conference on the ECB and Its Watchers III, Frankfurt, June 18, 2001, overhead slides.

Discussion of Anne Sibert, “Monetary Policy with Uncertain Central Bank Preferences,” presented at ISOM, Dublin, June 8-9, 2001, overhead slides.

Discussion of Blinder, Goodhart, Hildebrand, Lipton and Wyplosz, “How Do Central Banks Talk?” presented at the Third Geneva Conference, Geneva, May 4, 2001, overhead slides.

“Comments on Gaspar, Peres-Quiros and Sicilia, ‘The ECB Monetary Strategy and the Money Market’,” Vienna, April 19-20, 2001, PDF.

Discussion of McCallum, “Inflation Targeting and the Liquidity Trap,” FRBSF and SIEPR Conference on Asset Prices, Exchange Rates and Monetary Policy, Stanford University, March 2-3, 2001, overhead slides.

Discussion of Clarida, Gali and Gertler, “Optimal Monetary Policy in Open versus Closed Economies: An Integrated Approach,” American Economic Association Annual Meeting, January 5, 2001, overhead slides.

Discussion of Alvarez, Lucas and Weber, “Interest Rates and Inflation,” American Economic Association Annual Meeting, January 5, 2001, overhead slides.

Riksbanken i världsklass” (“The Riksbank in World Class,” in Swedish), interview in Dagens Industri, December 12, 2000.

“Comment on Charles Wyplosz, ‘Do We Know How Low Inflation Should Be?’,” April 2001, revised version of comments presented at the First ECB Central Banking Conference,Why Price Stability?, Frankfurt, November 2-3, 2000, PDF.

“Comments on Athanasios Orphanides, “The Quest for Prosperity without Inflation,” NBER Monetary Economics Program Meeting, Cambridge, MA, April 2000, overhead slides.

“Comment on Isard, Laxton and Eliasson, ‘Simple Monetary Policy Rules Under Model Uncertainty’,” in Peter Isard, Assaf Razin and Andrew Rose, eds. (1999), International Finance and Financial Crises: Essays in Honor of Robert P. FloodInternational Monetary Fund, Washington, and Kluwer Academic Publishers, Boston, 251-257, PDF.

Bristande transparens i ESCBs penningpolitiska strategi” (“Insufficient Transparency in ESCB’s Monetary Policy Stratetegy,” in Swedish), Europafocus Mars 1999.

“Commentary: How Should Monetary Policy Respond to Shocks While Maintaining Long-Run Price Stability?Conceptual issues,” in Achieving Price Stability, a symposium sponsored by the Federal Reserve Bank of Kansas City at Jackson Hole, Wyoming, August 29-31, 1996, PDF.