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We use a Bayesian Markov Chain Monte Carlo algorithm jointly to estimate the parameters of a 'true' data generating mechanism and those of a sequence of approximating models that a monetary authority uses to guide its decisions. Gaps between a true expectational Phillips curve and the monetary authority's approximating non-expectational Phillips curve(More)
We thank participants in a seminar at the Bank of England for comments on an early draft. The views expressed here are the authors' and not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System. Any remaining errors are the authors' responsibility. Federal Reserve Bank of Atlanta working papers, including revised versions,(More)
and San Francisco for helpful discussions and comments. The views expressed here are those of the authors and not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System. Any remaining errors are the authors' responsibility. To receive notification about new papers, please use the publications order form on this Web site, or(More)
Previous comparative analyses of gross and net settlement have focused on the credit risk of the central counterparty in net settlement arrangements, and on the incentives for participants to alter the risk of the portfolio under net settlement. By modeling the trading economy that generates the demand for payment services, we are able to show some largely(More)
T hree government-sponsored enterprises (GSEs) play a central role in U.S. housing finance markets. Together, the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), and the Federal Home Loan Bank System (FHLB System) hold or insure nearly $3 trillion in primarily mortgage-related assets. The three(More)