National Repository of Grey Literature 3 records found  Search took 0.01 seconds. 
Should Central Banks Try to Make Profit on their FX Reserves?
Tabášek, Jakub ; Havránek, Tomáš (advisor) ; Molnár, Vojtěch (referee)
The first part of the thesis uses vector autoregressions to examine the influence of foreign reserves on macroeconomic variables. The results suggest an econom- ically significant influence on both household consumption and gross capital formation in Brazil, Chile, Argentina, and Indonesia, while in the Philippines and South Korea the influence seems rather weak. However, there is some un- certainty surrounding the results and the relationships may be unstable through time, suggesting that the question is worth revisiting in the future. The second part deals with the management of foreign reserves and in- vestigates whether the long-term management by the Monetary Authority of Singapore, which entails the objective of providing a regular income stream to the government budget, could be an option for other central banks. Given the similarity of objectives, the discussion builds on a comparison with the man- agement practices of large U.S. university endowments and suggests that the comparison seems to yield interesting insights pertaining to asset allocation. However, constraints stemming from the size of central bank portfolios and challenges having to do with expertise and management may have implications for the overall stability of investment returns. Given the specific character of a central...
Price Level Targeting with Imperfect Rationality: A Heuristic Approach
Molnár, Vojtěch ; Holub, Tomáš (advisor) ; Horváth, Roman (referee)
Price Level Targeting with Imperfect Rationality: A Heuristic Approach Vojtěch Molnár Abstract The thesis compares price level targeting and inflation targeting regimes in a New Keynesian model without rational expectations hypothesis. Economic agents instead form their expectations using heuristics-they choose between a few simple rules based on their past forecasting performance. Two main specifications of the price level targeting model are examined-the agents form expectations either about price level or about inflation, which is ex ante not equivalent because of sequential nature of the model. In addition, several formulations of the forecasting rules are considered. According to the results, price level targeting is preferred in the case with expectations created about price level under the baseline calibration; but it is sensitive to some model parameters. Furthermore, when expectations are created about inflation, price level targeting over time loses credibility and leads to divergence of the economy. On the other hand, inflation targeting model functions stably. Therefore, while potential benefits of price level targeting have been confirmed under certain assumptions, the results suggest that inflation targeting constitutes significantly more robust choice for monetary policy.
Evaluating the Effects of Quantitative Easing in the UK Using the Synthetic Control Method
Molnár, Vojtěch ; Havránek, Tomáš (advisor) ; Malovaná, Simona (referee)
The thesis deals with quantitative easing (QE)-unconventional monetary policy, which was conducted by several central banks in the aftermath of recent financial crisis. Its goal is to boost the economy and to reach infla- tion target with key interest rates being already close to zero. The United Kingdom was one of the countries involved: Bank of England was conducting the policy in 2009-2012. The first part of the thesis focuses on quantitative easing in more detail; the policy is described in general, but special emphasis is put on Bank of England. The second part uses synthetic control method to estimate effect of the policy on real GDP and inflation of the United King- dom. The method does not lead to construction of appropriate control unit for GDP of the UK under unusual circumstances of the financial crisis. Pos- itive effect of quantitative easing on inflation is found, but its magnitude is surrounded by large uncertainty. 1

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