In a standard New-Keynesian sticky-price model, we study how the gains from commitment depend on how far ahead policymakers commit. While the traditional time-inconsistent solution assumes a once-and-for-all commitment to a plan for all future periods, we show that most of the gains can be...

Central banks are viewed by the general public as reputable institutions, a perception bolstered by economic theory and modeling. By extension, central bankers are thought of as benevolent, as decent men and women attempting to maximize societal welfare through their decisions. Yet, cases of...

We analyze a labor market with search and matching frictions where wage setting is controlled by a monopoly union. We take a benevolent view of the union in assuming it to care equally about employed and unemployed workers and we assume, moreover, that it is fully rational, thus taking job...