Guido Traficante

Uncertainty and Transparency of Monetary Policy

What is the proper degree of central bank transparency? This chapter investigates the issue in a framework characterized by (a) common uncertainty on potential output and (b) imperfect knowledge of the central bank target by the private sector. We show that full transparency is socially beneficial under a variety of parametrizations. Our results confirm, in a different setup, those of Faust and Svensson (2001, 2002), and Svensson (2006).

La restrizione del credito in uno schema di teoria monetaria della produzione: il caso italiano

Questo articolo analizza le determinanti e gli effetti di una stretta creditizia in Italia, all’interno della teoria monetaria della produzione elaborata da Augusto Graziani. Sosteniamo che la restrizione creditizia, tra le altre cose, dipende da un declino nella domanda aggregata. Dal punto di vista empirico, cio e mostrato per Italia, Francia e Germania. Tuttavia, si evidenzia che una stretta monetaria decisa dalla Banca Centrale Europea – quindi comune ai tre paesi – non induce una riduzione statisticamente significativa del credito in Italia. Questo risultato probabilmente e causato della scarsa sostituibilita del credito bancario come fonte di finanziamento, dato che la struttura produttiva italiana e prevalentemente caratterizzata da piccole e medie imprese. This paper deals with the causes and the effects of a credit restriction in Italy, within the theoretical framework of the monetary theory of production, as elaborated by Augusto Graziani. It will be argued that credit restriction ultimately depends on the decline of aggregate demand. Empirically, this view is supported for Italy, France and Germany. However, a monetary policy tightening implemented by the European Central Bank does not lead to a significant credit reduction in Italy, probably due to the low degree of substitutability of bank financing, given that the Italian production structure is mainly characterized by small and medium enterprises. JEL codes : E12, E51, E52 Keywords : monetary theory of production, credit restriction, aggregate demand

Monetary Policy with Parameter Uncertainty in Small-Open Economy

ABSTRACT This paper computes optimal robust monetary policy in a new Keynesian small-open economy model with Knightian uncertainty about the degree of price stickiness and the elasticity of substitution between domestic and foreign goods. Due to the simple model structure used in the paper, I can derive analytical results for the min–max solution under discretion and assess how a robust optimal Taylor rule must be set in small-open economy. I find that, in an optimal robust discretionary equilibrium, the central bank should assume that the degree of price stickiness and the elasticity of substitution between domestic and foreign goods take on their highest numerical values. In terms of interest rate setting, if the optimal discretionary robust equilibrium is implemented with a Taylor rule, the policy rate should react to inflation in a less aggressive way than in the case of complete information.