News Shocks and the Effects of Monetary Policy

An Evaluation of the Impact of Monetary Easing Policies in Times of a Pandemic

“…The conventional methods for controlling the monetary base in the economy entail controlling for lending and bank interest rates in the economy ( 4 ). As the economy is faced with choppy waters, the policymakers try and ensure normalcy by giving a slight push to the industries by lowering the interest rates and easing credit availability in the economy ( 5 ). This ensures that the productive capacity is brought at par, and the output gap within the economy narrows down.…”

Ties that Bind: Estimating the Natural Rate of Interest for Small Open Economies

“…We center the prior mean for the discount factor, , around 0:994 therefore implying that the annualized real rate in steady state, r ss , is around 2:5%. The prior for the slope coe¢ cient in the Phillips curve, ( 1)(1 ) , is set with a loose Gamma prior centered at 0:5, which is consistent with values reported elsewhere in the literature (Rotemberg and Woodford (1998); Galí and Gertler (1999); Sbordone (2002); Zhang (2019)). We also restrict the intertemporal elasticity of substitution to lie inside the interval [0; 1) with a Beta prior with a mean of 0:5.…”

Empirical Examination on the Drivers of the U.S. Equity Returns in the During the COVID-19 Crisis

“…Following previous papers, we use the gold returns and crude oil returns to capture the hedging and portfolio diversification purposes in the financial markets (6,11). We also include the United States Dollar (USD)'s real value to capture the monetary policy's effects on the stock market returns (15)(16)(17). We then add the volatility index (VIX) and the newspaper-based infectious disease equity market volatility tracker (EMVT-ID), which contain useful information for modeling stock market returns (18)(19)(20)(21).…”