Successful descriptions of short-term nominal interest rates inertial behavior have frequently been obtained with small scale macro models in which a Central Banker minimizes a loss function embedding an argument labelled as interest rate smoothing. The rationale for this argument is not...

The optimal policy response to a low-probability extreme event is examined. A simple policy problem is solved for a sequence of different loss functions: quadratic, combined quadratic/absolute-deviation, absolute-deviation, combined quadratic/constant, and perfectionist. The paper shows that,...

Successful descriptions of short-term nominal interest rates inertial behavior have frequently been obtained with small scale macro models in which a Central Banker minimizes a loss function embedding an argument labelled as interest rate smoothing. The rationale for this argument is not...

The design of monetary policy depends on the targeting strategy adopted by the central bank. This strategy describes a set of policy preferences, which are actually the structural parameters to analyse monetary policy making. Accordingly, we develop a calibration method to estimate a central...

In this paper, I present a theory of management control based on Transaction Cost Economics. This theory seeks to integrate into a single framework a set of insights as to the nature of the organization&apos's activities, the control problems that are inherent in these activities, and the unique...

The paper explains how simple problems of discrete time optimal control can be solved using a standard spreadsheet software. The employed solution method of backward iteration is intuitively understandable, does not require any programming skills, and is very easy to implement so that it is...

The controllability principle, which stipulates that managers should only be evaluated based on elements that they can control, has been widely studied in the management control literature, both from theoretical and empirical perspectives. It is based on the idea that managers are better...