Search Results
Conference Paper
Monetary policy rules for an open economy
The most popular simple rule for the interest rate, due to Taylor (1993a) is meant to inform monetary policy in economies that are closed. On the other hand, its main open economy alternative, i.e. Ball's (1999) rule based on a Monetary Conditions Index (MCI), may perform poorly in the face of specific types of exchange rate shocks and thus cannot offer guidance for the day-to-day conduct of monetary policy. In this paper we specify and evaluate a comprehensive set of simple monetary policy rules that are suitable for small open economies in general, and for the United Kingdom in particular. ...
Conference Paper
Financial innovation, macroeconomic stability and systemic crises
Working Paper
Inflation dynamics with labour market matching: assessing alternative specifications
This paper reviews recent approaches to modeling the labour market and assesses their implications for inflation dynamics through both their effect on marginal cost and on price-setting behavior. In a search and matching environment, we consider the following modeling setups: right-to-manage bargaining vs. efficient bargaining, wage stickiness in new and existing matches, interactions at the firm level between price and wage-setting, alternative forms of hiring frictions, search on-the-job and endogenous job separation. We find that most specifications imply too little real rigidity and, so, ...