Why are well-anchored inflation expectations important for the effectiveness of monetary policy?

Mar 1, 2014 ... Second, contractionary monetary policy shocks increase capital inflows into the bond market consistent with the prediction of the uncovered ... Contractionary monetary policy is one of the two types of monetary policy and can be defined as actions taken by the central bank in order to close an ... At the same time, the unemployment rate is very low. In this case, the Fed might decide to use contractionary monetary policy to bring inflation back to the ... Aug 10, 2022 ... In this paper we analyse the role of fiscal policy and its debt maturity structure which is producing this "monetary contraction" through its ... ... monetary policy. According to our results, a contractionary monetary policy shock generates long-run adverse effects on the level of real wages. While the ... Mar 26, 1999 ... By shifting toward more contractionary monetary policies, other gold standard countries could ensure that domestic interest rates would rise in ... Oct 5, 2023 ... A contractionary monetary policy shock leads to a significant increase in labor supply: workers reduce the rate at which they quit jobs to non-employment. Nov 23, 2022 ... "Some households are already bumping up against financial constraints and that's where the banks and fiscal policy need to show concern," Orr ... "The Monetary Policy Debate Since October 1979: Lessons for Theory and Practice." Federal Reserve Bank of St. Louis Review 87, no. 2, part 2 (March/April ... Contractionary monetary policy is a type of economic strategy used by central banks to decrease the money supply and increase interest rates in order to combat ...