Steve Ambler | Université du Québec à Montréal (original) (raw)
Papers by Steve Ambler
Bank of Canada Review, 2007
for helpful discussions and comments. All errors are my own responsibility. The views expressed i... more for helpful discussions and comments. All errors are my own responsibility. The views expressed in this article are my own and not those of the Bank of Canada. 1 A PT regime does not necessarily mean that the long-run price level is constant, since the target path may have a positive slope (which determines the long-run rate of infl ation). What a PT regime does mean is that the central bank acts to offset deviations of the price level from the target path. 2 An older literature on PT goes back to Keynes, Fisher, Wicksell, and others. See Duguay (1994) for a cogent survey.
RePEc: Research Papers in Economics, Feb 9, 2017
84th International Atlantic Economic Conference, Oct 8, 2017
We evaluate inflation targeting and price-level targeting in a simulation model that explicitly t... more We evaluate inflation targeting and price-level targeting in a simulation model that explicitly takes into account the central bank’s zero lower bound constraint on its policy rate. We find that the economy is much less likely to hit the zero bound under price-level targeting for a given rate of inflation. Trend inflation is optimally positive under both regimes because of the zero lower bound, but is lower under price-level targeting, which delivers an en-hanced level of economic welfare. Monetary policy is modeled using simple rules. We model the lower bound constraint with a smooth function that can approximate a kink.
The American Economic Review, 1985
Journal of International Money and Finance, Jun 1, 2019
The Working Paper series of the Oesterreichische Nationalbank is designed to disseminate and to p... more The Working Paper series of the Oesterreichische Nationalbank is designed to disseminate and to provide a platform for Working Paper series of the Oesterreichische Nationalbank is designed to disseminate and to provide a platform for Working Paper series of the Oesterreichische Nationalbank discussion of either work of the staff of the OeNB economists or outside contributors on topics which are of special interest to the OeNB. To ensure the high quality of their content, the contributions are subjected to an international refereeing process. The opinions are strictly those of the authors and do in no way commit the OeNB.
Economics Letters, 1987
Abstract The paper illustrates how Laplace transforms can be used to solve dynamic perfect foresi... more Abstract The paper illustrates how Laplace transforms can be used to solve dynamic perfect foresight models in which some of the forcing variables can be characterized by impulse (Dirac delta) functions. The technique is applied to a variant of the Dornbusch (1976) exchange rate overshooting model.
RePEc: Research Papers in Economics, Feb 1, 2015
We compare inflation targeting and price-level targeting in the canonical New Keynesian model, wi... more We compare inflation targeting and price-level targeting in the canonical New Keynesian model, with particular attention to multiple steady-states, indeterminacy, and global stability. Under price-level targeting we show the following: 1) the well-known problem of multiple steady-state equilibria under inflation targeting is absent; 2) the model’s dynamics close to the steady state are determinate for a much wider range of parameter values; 3) the model is globally saddlepoint stable. These results provide additional arguments in favour of price-level targeting as a monetary policy framework.
RePEc: Research Papers in Economics, 2007
Cahier de recherche, 1995
This paper examines the role of wage indexation and indexation lags in stabilization programs. We... more This paper examines the role of wage indexation and indexation lags in stabilization programs. We analyze whether the added inflation inertia caused by such lags increases the importance of the heterodox aspects of anti-inflation stabilization programs, which involve the imposition of direct wage and price controls. For this purpose, we build a model of a small, open, semi-industrialized economy which incorporates nominal rigidities via staggered wage contracts. The model allows for a variable degree of indexation to the cost of living which is implemented with a variable lag. Nous examinons le role de l'indexation et des delais d'indexation pour la stabilisation economique. Nous analysons si l'inertie accrue due aux delais peut rendre plus importants les aspects heterodoxes des programmes anti-inflation, aspects qui comprennent l'utilisation de controles directs sur les prix et les salaires. Pour cette fin, nous utilisons un modele d'une petite economie semi-industrialisee avec une rigidite nominale qui provient de contrats de salaire chevauches. Le modele permet a la fois un degre d'indexation et un delai d'indexation variables.
RePEc: Research Papers in Economics, 1989
The paper characterizes the optimal time-consistent acti-idhim program in a malt, o semi-industri... more The paper characterizes the optimal time-consistent acti-idhim program in a malt, o semi-industrialized economy when policy makers choose the rate of exchange rate crawl, the rate' of change of fiscal spending and a wage and price control parameter to minimize deviations of output and inflation. The optima! program involves a rapidly decelerating rate of crawl, a sharp reduction in spending, and a short initial period of wage and price controls. The paper also assesses the importance of controls in helping to reduce the output loss associated with fighting inflation. Several semi-industrialized economies have suffered from of high inflation or hyperinflation during the 70s and 80s. programs have been put together in order to stabitize these economies.' Common elements of these pr pegs with decelerating rates necessity and temptation of i ating rate of exchange rate d xpectations and thereby any of these stabilization inflation and have bee *We thank Philippe Michel, Frank Shupp, and es ially an a~o~yrno~s FEier journal for their helpful comments. Both authors received financial su Sciences and Humanities Resea from the FCAR program of the 'Blejer and Liviatan (1987) compare stabilization 0304-3878/92/$05.00 @J 1992-4lsevier Science Publishers ghts reserv 'The importance of usbg wageprice controls is also stressed in Dornb~r5 (1886): "The USC of exchange-rate fixing and wage-price controls is therefore a helpful and ~~~~~y r complement to fiercely orthodox budget correction' (pp. 1 'WC aho briefly compare the results to a see the gave to be able to ~~~~~~~~~~it to it5 policy.
RePEc: Research Papers in Economics, May 1, 1994
We extend the Hansen and Prescott approximation method for the numerical solution of dynamic busi... more We extend the Hansen and Prescott approximation method for the numerical solution of dynamic business cycle models to models of two agents who play a dynamic Stackelberg game. Such models have application to the analysis of issues of optimal policy with the government as the leader and a representative private agent as the follower. We show in detail how to derive time-consistent policy rules. We discuss the details of the numerical algorithm and its convergence, and we consider an application of the algorithm to a model of optimal fiscal policy.
RePEc: Research Papers in Economics, Jul 1, 1996
This paper explores the quantitative link between export-promoting commercial policies and econom... more This paper explores the quantitative link between export-promoting commercial policies and economic growth. We build and calibrate a dynamic general equilibrium model of a small developing economy. The economy's equilibrium is suboptimal due to monopolistic competition in the manufacturing sector and a human capital accumulation externality. Second-best commercial policy that promotes exports in the sector with the externality can lead to an increase in both welfare and growth rates. We show that export-promoting policies can lead to substantial quantitative increases in steady-state growth for a wide range of parameter values.
RePEc: Research Papers in Economics, 1991
RePEc: Research Papers in Economics, 1987
ABSTRACT We Show That the Destabilizing Effects of Price Flexibility Due to the Increased Sensiti... more ABSTRACT We Show That the Destabilizing Effects of Price Flexibility Due to the Increased Sensitivity of Contract Wages to Labor Market Tightness Depends Critically on an Arbitrary Restriction on the Information Available to Wage Settes Who Ae Negotiating Contact Renewals. If These Agents Are Put on the Same Footing As Investors and the Monetary Authorities by Being Given Access to Current Information Then Increased Price Flexibility Can Reduce the Magnitude of Economic Fluctuations in the Face of Demand Shocks. Contrary to Other Recent Papers, This Result Is Derived Completely Within a Staggered Contracts Framework.
RePEc: Research Papers in Economics, Jul 1, 2017
Quantitative easing in the US has meant a massive increase in the size of the Fed’s balance she... more Quantitative easing in the US has meant a massive increase in the size of the Fed’s balance sheet and the monetary base without a commensurate increase in ini¬‚ation. Instead, velocity has decreased dramatically. The only comparable episode in recent economic history was Japan’s experiment with quantitative easing in the early 2000s, where ini¬‚ation remained low or negative and which ended in 2006 when the Bank of Japan reduced the size of its balance sheet to a level compatible with the growth path it was on before quantitative easing. We show that this is precisely what we would expect in a standard New Keynesian model in response to an increase in the money supply that is expected to be temporary.
RePEc: Research Papers in Economics, Nov 1, 2016
Bank of Canada Review, 2007
for helpful discussions and comments. All errors are my own responsibility. The views expressed i... more for helpful discussions and comments. All errors are my own responsibility. The views expressed in this article are my own and not those of the Bank of Canada. 1 A PT regime does not necessarily mean that the long-run price level is constant, since the target path may have a positive slope (which determines the long-run rate of infl ation). What a PT regime does mean is that the central bank acts to offset deviations of the price level from the target path. 2 An older literature on PT goes back to Keynes, Fisher, Wicksell, and others. See Duguay (1994) for a cogent survey.
RePEc: Research Papers in Economics, Feb 9, 2017
84th International Atlantic Economic Conference, Oct 8, 2017
We evaluate inflation targeting and price-level targeting in a simulation model that explicitly t... more We evaluate inflation targeting and price-level targeting in a simulation model that explicitly takes into account the central bank’s zero lower bound constraint on its policy rate. We find that the economy is much less likely to hit the zero bound under price-level targeting for a given rate of inflation. Trend inflation is optimally positive under both regimes because of the zero lower bound, but is lower under price-level targeting, which delivers an en-hanced level of economic welfare. Monetary policy is modeled using simple rules. We model the lower bound constraint with a smooth function that can approximate a kink.
The American Economic Review, 1985
Journal of International Money and Finance, Jun 1, 2019
The Working Paper series of the Oesterreichische Nationalbank is designed to disseminate and to p... more The Working Paper series of the Oesterreichische Nationalbank is designed to disseminate and to provide a platform for Working Paper series of the Oesterreichische Nationalbank is designed to disseminate and to provide a platform for Working Paper series of the Oesterreichische Nationalbank discussion of either work of the staff of the OeNB economists or outside contributors on topics which are of special interest to the OeNB. To ensure the high quality of their content, the contributions are subjected to an international refereeing process. The opinions are strictly those of the authors and do in no way commit the OeNB.
Economics Letters, 1987
Abstract The paper illustrates how Laplace transforms can be used to solve dynamic perfect foresi... more Abstract The paper illustrates how Laplace transforms can be used to solve dynamic perfect foresight models in which some of the forcing variables can be characterized by impulse (Dirac delta) functions. The technique is applied to a variant of the Dornbusch (1976) exchange rate overshooting model.
RePEc: Research Papers in Economics, Feb 1, 2015
We compare inflation targeting and price-level targeting in the canonical New Keynesian model, wi... more We compare inflation targeting and price-level targeting in the canonical New Keynesian model, with particular attention to multiple steady-states, indeterminacy, and global stability. Under price-level targeting we show the following: 1) the well-known problem of multiple steady-state equilibria under inflation targeting is absent; 2) the model’s dynamics close to the steady state are determinate for a much wider range of parameter values; 3) the model is globally saddlepoint stable. These results provide additional arguments in favour of price-level targeting as a monetary policy framework.
RePEc: Research Papers in Economics, 2007
Cahier de recherche, 1995
This paper examines the role of wage indexation and indexation lags in stabilization programs. We... more This paper examines the role of wage indexation and indexation lags in stabilization programs. We analyze whether the added inflation inertia caused by such lags increases the importance of the heterodox aspects of anti-inflation stabilization programs, which involve the imposition of direct wage and price controls. For this purpose, we build a model of a small, open, semi-industrialized economy which incorporates nominal rigidities via staggered wage contracts. The model allows for a variable degree of indexation to the cost of living which is implemented with a variable lag. Nous examinons le role de l'indexation et des delais d'indexation pour la stabilisation economique. Nous analysons si l'inertie accrue due aux delais peut rendre plus importants les aspects heterodoxes des programmes anti-inflation, aspects qui comprennent l'utilisation de controles directs sur les prix et les salaires. Pour cette fin, nous utilisons un modele d'une petite economie semi-industrialisee avec une rigidite nominale qui provient de contrats de salaire chevauches. Le modele permet a la fois un degre d'indexation et un delai d'indexation variables.
RePEc: Research Papers in Economics, 1989
The paper characterizes the optimal time-consistent acti-idhim program in a malt, o semi-industri... more The paper characterizes the optimal time-consistent acti-idhim program in a malt, o semi-industrialized economy when policy makers choose the rate of exchange rate crawl, the rate' of change of fiscal spending and a wage and price control parameter to minimize deviations of output and inflation. The optima! program involves a rapidly decelerating rate of crawl, a sharp reduction in spending, and a short initial period of wage and price controls. The paper also assesses the importance of controls in helping to reduce the output loss associated with fighting inflation. Several semi-industrialized economies have suffered from of high inflation or hyperinflation during the 70s and 80s. programs have been put together in order to stabitize these economies.' Common elements of these pr pegs with decelerating rates necessity and temptation of i ating rate of exchange rate d xpectations and thereby any of these stabilization inflation and have bee *We thank Philippe Michel, Frank Shupp, and es ially an a~o~yrno~s FEier journal for their helpful comments. Both authors received financial su Sciences and Humanities Resea from the FCAR program of the 'Blejer and Liviatan (1987) compare stabilization 0304-3878/92/$05.00 @J 1992-4lsevier Science Publishers ghts reserv 'The importance of usbg wageprice controls is also stressed in Dornb~r5 (1886): "The USC of exchange-rate fixing and wage-price controls is therefore a helpful and ~~~~~y r complement to fiercely orthodox budget correction' (pp. 1 'WC aho briefly compare the results to a see the gave to be able to ~~~~~~~~~~it to it5 policy.
RePEc: Research Papers in Economics, May 1, 1994
We extend the Hansen and Prescott approximation method for the numerical solution of dynamic busi... more We extend the Hansen and Prescott approximation method for the numerical solution of dynamic business cycle models to models of two agents who play a dynamic Stackelberg game. Such models have application to the analysis of issues of optimal policy with the government as the leader and a representative private agent as the follower. We show in detail how to derive time-consistent policy rules. We discuss the details of the numerical algorithm and its convergence, and we consider an application of the algorithm to a model of optimal fiscal policy.
RePEc: Research Papers in Economics, Jul 1, 1996
This paper explores the quantitative link between export-promoting commercial policies and econom... more This paper explores the quantitative link between export-promoting commercial policies and economic growth. We build and calibrate a dynamic general equilibrium model of a small developing economy. The economy's equilibrium is suboptimal due to monopolistic competition in the manufacturing sector and a human capital accumulation externality. Second-best commercial policy that promotes exports in the sector with the externality can lead to an increase in both welfare and growth rates. We show that export-promoting policies can lead to substantial quantitative increases in steady-state growth for a wide range of parameter values.
RePEc: Research Papers in Economics, 1991
RePEc: Research Papers in Economics, 1987
ABSTRACT We Show That the Destabilizing Effects of Price Flexibility Due to the Increased Sensiti... more ABSTRACT We Show That the Destabilizing Effects of Price Flexibility Due to the Increased Sensitivity of Contract Wages to Labor Market Tightness Depends Critically on an Arbitrary Restriction on the Information Available to Wage Settes Who Ae Negotiating Contact Renewals. If These Agents Are Put on the Same Footing As Investors and the Monetary Authorities by Being Given Access to Current Information Then Increased Price Flexibility Can Reduce the Magnitude of Economic Fluctuations in the Face of Demand Shocks. Contrary to Other Recent Papers, This Result Is Derived Completely Within a Staggered Contracts Framework.
RePEc: Research Papers in Economics, Jul 1, 2017
Quantitative easing in the US has meant a massive increase in the size of the Fed’s balance she... more Quantitative easing in the US has meant a massive increase in the size of the Fed’s balance sheet and the monetary base without a commensurate increase in ini¬‚ation. Instead, velocity has decreased dramatically. The only comparable episode in recent economic history was Japan’s experiment with quantitative easing in the early 2000s, where ini¬‚ation remained low or negative and which ended in 2006 when the Bank of Japan reduced the size of its balance sheet to a level compatible with the growth path it was on before quantitative easing. We show that this is precisely what we would expect in a standard New Keynesian model in response to an increase in the money supply that is expected to be temporary.
RePEc: Research Papers in Economics, Nov 1, 2016