This article evaluates sticky-price models using the methods proposed by Burns and Mitchell, focusing on the monetary aspects of the business cycle. Recent research has emphasized the responses of models to shocks at the expense of its systematic component. Whereas sticky-price models have been...

Working with micro-founded loss functions to derive and analyse optimal policy ensures consistency with the model used and overcomes the misleading prescriptions that result from using exogenous ad hoc loss functions. However, when allowance is made for the fact that different theories of...

type="main" <p>We use quantile regressions to model monetary policy reaction functions in three small open economies: Australia, Canada and New Zealand. Focusing on Taylor-type rules, we find evidence of asymmetric interest rate responses for all the countries considered, with monetary policy...</p>

Given the large amount of interaction between research on monetary policy and its practice, this article examines whether some simple monetary policy rules that have been proposed in the academic literature, part of which has originated from within central banks, provide a reasonable...

Optimal monetary policy under discretion is analysed in a New Keynesian model with rule of thumb pricing. The paper finds that social welfare increases if the policy maker does not discount the future. The welfare improvement rises with the extent of intrinsic inflation persistence.

One major strand in optimal monetary policy analysis considers the robustness of alternative policies under model uncertainty. Another has focused on the appropriate perspective for optimal monetary policy, namely discretion or the timeless perspective (TP). The paper bridges these two parallel...

A new spatial decomposition of total factor productivity growth into direct (own) and indirect (spillover) components is set out. We then apply the decomposition in the context of a spatial autoregressive production frontier analysis of 40 European countries over the period 1995–2008.