Estimation of forward-looking interest rate rules is ubiquitous in the context of developed economy central banks. This paper considers the five countries in Latin America that have adopted the Inflation Targeting framework and performs estimations of forward-looking rules via i) standard...

Using a macro-econometric model that is specified for the current Chinese economy, we investigate the performance of monetary policy in China with the assumption (which anyway will occur in the near future) that capital market was opened. Our purpose is to find how the monetary authority should...

This paper makes use of an adaptive agent framework to extend traditional models of comparative advantage in international trade, illustrating several cases which make theoretical room for industrial policy and the regulation of trade. Using an agent based implementation of the Hecksher-Ohlin...

Unstable government debt dynamics can typically be corrected by various fiscal instruments, like appropriate adjustments in government spending, public transfers, or taxes. This paper investigates properties of state-contingent debt targeting rules which link stabilizing budgetary adjustments...

While tests for unit roots and cointegration have important econometric and economic implications, they do not always offer conclusive results. For example, Rudebusch (1992; 1993) demonstrates that standard unit root tests have low power against estimated trend stationary alternatives. In addition,...

Recent literature in Industrial Organization has shown that the threat of entry limits the price setting power of dominant firms and stimulates the incumbents to increase innovations ---both leading to welfare improvements. On the other hand dominant firms as incumbents strive to build up entry...

Centralized exchange has a worst-case size-complexity many orders of magnitude lower than decentralized monetary exchange for the same number of agents and goods. A more rapid approach to competitive equilibrium may therefore be possible through centralized exchange. An additional benefit of...

Total factor productivity (TFP) computed as Solow-residuals could be subject to input-substitution bias for two reasons. First, the Cobb-Douglas (CD) production function restricts all input substitutions to one. Second, observed inputs generally differ from optimal inputs, so that inputs...

This paper documents the out-of-sample forecasting accuracy of the New Keynesian Model for Canadian data. We repeatedly estimate the model over samples of increasing lengths, forecasting out-of-sample one to four quarters ahead at each step. We then compare these forecasts with those arising...

Deposit insurance and capital requirements are two focuses in banking literature. Many researchers criticize these two important schemes using moral hazard theory: Under the protection of the deposit insurance, banks have incentive to take deposits as much as they can for some debt-favor reasons...