This paper elaborates a simple model of growth with a Taylor-like monetary policy rule that includes inflation-targeting as a special case. When the inflation process originates in the product market, inflation-targeting locks in the unemployment rate prevailing at the time the policy matures....

This paper develops a theory of employment guarantees when labor markets are imperfect and when the credibility of government policy announcements could be in doubt. The basic feature of an EGS is that any individual who satisfies a set of specified criteria is guaranteed public employment at a...