Special Issue "Monetary Policy, Inflation and Unemployment Dynamics: Theory and Empirics"

A special issue of Journal of Risk and Financial Management (ISSN 1911-8074). This special issue belongs to the section "Economics and Finance".

Deadline for manuscript submissions: 31 December 2021.

Special Issue Editor

Prof. Dr. Antonio Ribba
E-Mail Website
Guest Editor
Dipartimento di Economia Politica, Universita di Modena e Reggio Emilia, 41121 Modena, Italy
Interests: applied macroeconomics; monetary and fiscal policy; time series analysis; business cycle fluctuations

Special Issue Information

Dear Colleagues,

This Topical Collection welcomes contributions on the dynamic interactions among monetary policy, inflation and unemployment. The contributions may concern both theoretical and applied issues.

As far as monetary policy is concerned, in the most recent decade, zero lower bound on interest rates and the deepness of the economic and financial crises have stimulated the adoption of unconventional monetary policies by central banks. Therefore, we are especially interested in research oriented towards the identification of monetary policy disturbances in this new economic context, and towards studying the dynamic responses of inflation and unemployment, by using structural VAR models and other multivariate time-series techniques. The responses of inflation and unemployment to changes in monetary policy and other macroeconomic shocks also relate to the old-but-still-timely theme of the Phillips curve. Although the short-term inverse relationship between these two variables seems to periodically disappear in industrialized countries, it remains a building block of the majority of business-cycle models. Moreover, one branch of the literature has also investigated the possibility of long-term effects induced by economic recessions on the unemployment rate, that is, on the hysteresis in unemployment. Hence, another important question that may be worth investigating concerns the possible long-term effects exerted on the unemployment rate by the Great Recession and/or by the more recent collapse of the world economy induced by the COVID-19 pandemic.

The aim is to provide contributions that offer new evidence and insights into such issues. This Topical Collection will be published in printed book format if more than seven papers are accepted for publication.

Prof. Dr. Antonio Ribba
Guest Editor

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All papers will be peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Journal of Risk and Financial Management is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1200 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • Monetary Policy
  • Unconventional Monetary Policy
  • Inflation
  • Inflation Expectations
  • Unemployment
  • Business Cycle Fluctuations
  • Phillips Curve
  • Hysteresis
  • Structural VARs
  • Multivariate Time Series Analysis

Published Papers (2 papers)

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Research

Article
Do Inflation Expectations Matter for Small, Open Economies? Empirical Evidence from the Solomon Islands
J. Risk Financial Manag. 2021, 14(9), 448; https://doi.org/10.3390/jrfm14090448 (registering DOI) - 17 Sep 2021
Abstract
This paper examines the role of inflation expectations in Solomon Islands, a Pacific Island Country, using the Hybrid New Keynesian Phillips Curve model. The study applies the Generalized Method of Moments to estimate the Hybrid New Keynesian Philips Curve model using quarterly time [...] Read more.
This paper examines the role of inflation expectations in Solomon Islands, a Pacific Island Country, using the Hybrid New Keynesian Phillips Curve model. The study applies the Generalized Method of Moments to estimate the Hybrid New Keynesian Philips Curve model using quarterly time series data for the period 2003–2017. The study confirms the existence of a Hybrid New Keynesian Philips Curve for Solomon Islands and finds that both backward-looking and forward-looking processes matter for inflation. Fuel prices and output gap are important indicators of current inflation. The study highlights key areas to further investigate including the weak monetary transmission mechanism and to examine the exchange rate pass through effect onto domestic prices. Studies on the role of inflation expectations in small, open, economies of the Pacific, such as Solomon Islands, is limited. This paper fills this void in literature by using quarterly time-series data to build a Hybrid New Keynesian Philips Curve model for Solomon Islands. Full article
Article
Policy and Business Cycle Shocks: A Structural Factor Model Representation of the US Economy
J. Risk Financial Manag. 2021, 14(8), 371; https://doi.org/10.3390/jrfm14080371 - 13 Aug 2021
Viewed by 283
Abstract
We use a dynamic factor model to provide a semi-structural representation for 101 quarterly US macroeconomic series. We find that (i) the US economy is well described by a number of structural shocks between two and five. Focusing on the four-shock specification, we [...] Read more.
We use a dynamic factor model to provide a semi-structural representation for 101 quarterly US macroeconomic series. We find that (i) the US economy is well described by a number of structural shocks between two and five. Focusing on the four-shock specification, we identify, using sign restrictions, two policy shocks, monetary and fiscal, and two non-policy shocks, demand and supply. We obtain the following results. (ii) Both supply and demand shocks are important sources of fluctuations; supply prevails for GDP, while demand prevails for employment and inflation. (ii) Monetary and fiscal policy shocks have sizable effects on output and prices, with no evidence of crowding-out of private aggregate demand components; both monetary and fiscal authorities implement important systematic countercyclical policies reacting to demand shocks. (iii) Negative demand shocks have a large long-run positive effect on productivity, consistently with the Schumpeterian “cleansing” view of recessions. Full article
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