This article uses a vector autoregression (VAR) approach to identify the causes of the 1990-92 recession in the UK. The VAR approach is shown to be particularly pertinent for quantifying the relative magnitude of the different demand shocks, and in decomposing them into monetary and...

The paper develops a model of a small economy that trades commodities whose world prices fluctuate exogenously, and studies its implications for monetary policy. It derives analytical characterizations of optimal Ramsey and flexible price allocations under both perfect risk sharing and financial...