“Monetary policy in a two-country model with behavioral expectations” - Warsaw Economic Seminars [11.05.2023]
We kindly invite you to take part in the next meeting within the Warsaw Economic Seminars series, organised jointly by the Faculty of Economic Sciences, University of Warsaw and the Warsaw School of Economics.
During the meeting prof. Michał Brzoza-Brzezina (Narodowy Bank Polski) will present the research “Monetary policy in a two-country model with behavioral expectations”.
The seminar will take place on May 11th 2023 2023 at 5 p.m. in hybrid mode: in room A203 at the Faculty of Economic Sciences (Długa 44/50) and via Zoom platform: https://uw-edu-pl.zoom.us/j/94952861067?pwd=eWFxK0N3SWJJdUNtZUQ4RDYxQ1loZz09
Meeting ID: 949 5286 1067
Passcode: 149259
Abstract:
We study the working of monetary policy in an estimated two-country model with behavioural expectations(BE). We first show that the data favors this setting compared with the standard rational expectations assumption. Then we document several findings related to monetary policy in the open-economy framework. First, under BE the Taylor principle depends on the size of the economy - determinacy regions are larger for the small country. Second, both in the small and large economies, monetary policy is less powerful when agents are behavioral. Third, the sacrifice ratio faced by the central bank increases with agents becoming more behavioral (more in the small country). Fourth, BE help to partly solve the puzzles of excess foreign currency returns (UIP puzzle) and of international monetary independence.
The calendar of all seminars within the Warsaw Economic Seminars series is available on the website: https://sites.google.com/site/warsaweconseminars/calendar
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The aim of the Warsaw Economic Seminars series is to create a platform for researchers and specialists from all over the world to present their research and share knowledge on economics and economic policy.
The participants can both listen to presentations and take part in discussions and present their own research to get feedback from other researchers and students.
