The Central Bank of Ireland is organising a workshop on the effects macroeconomic policy announcements have on agents’ expectations and their actions. The main focus is on the Dynamic, Stochastic General Equilibrium (DSGE) macroeconomic models used for policy analysis. The workshop will take place on 5 and 6 October, 2017 in Dublin.
Expectations of households and firms regarding future monetary and fiscal policies have been at the heart of macroeconomic policy debates at least since the 1970s, most notably in the context of how to limit the costs of disinflations. Since the financial crisis and the European sovereign debt crisis, policymakers aiming to stabilise inflation and economic activity had to rely even more on their ability to influence the expectations of the private sector. As short term interest rates hit the zero lower bound, some central banks aimed to influence long term rates by announcing the future path of the policy rate, and also tried to affect long term rates more directly by means of asset purchases. Similarly, the key rationale behind fiscal policy measures taken during the crisis and the accompanying structural reforms was that their favourable effect on the expectations of households and firms would counterbalance direct contractionary effects. This workshop aims to be a forum for recent contributions analysing the current macroeconomic effects of future policy changes or long term plans.
The programme can be found here:
Programme – Macroeconomic Effects of Policy Announcements FINAL.