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Home | Events Archive | Improving FOMC Policy with Credit Spreads
Seminar

Improving FOMC Policy with Credit Spreads

  • Series
    Research on Monday
  • Speaker(s)
    Jeff Campbell (University of Notre Dame, United States and Tilburg University)
  • Field
    Macroeconomics
  • Location
    Erasmus University Rotterdam, Polak 2-09
    Rotterdam
  • Date and time

    December 16, 2024
    11:30 - 12:30

Abstract

This paper estimates the gains from adding credit spreads to the FOMC’s policy rule using both a monetary VAR and a calibrated DSGE model. Our estimates suggest that this change can reduce the variance of consumption and employment gaps by about 1/3. This improvement reflects closer tracking of the natural rate of interest.