This paper reports on the deliberations of a special plenary panel session organised on behalf of the UK?s Monetary Macro, Finance Research Group (MMFRG) at the 31st International Symposium of the Groupement de Recherche Européen (GdRE) : Monnaie, Banque et Finance (MBF) on 19th June 2014 in...

This paper shows that rules of optimal policy under commitment allow policymakers to lean against bubbles and to stabilize an unstable economy. In this framework, policymakers anchor the initial values of the expectations of the private sector. Then, this paper sets identification conditions for...

In multiple regressions, explanatory variables with simple correlation coefficients with the dependent variable below 0.1 in absolute value (such as aid/gross domestic product (GDP) with GDP growth) face a problem of parameter identification. They may have very large, statistically significant,...

This paper shows that a multiple regression with two highly correlated explanatory variables, both of them with a near zero correlation with the dependent variable may correspond to a spurious regression or to a homeostatic model, with estimates highly sensible to outliers. The regression method...

This paper shows that the firm markup, capital and the expected rate of capacity utilisation depend on its financial structure (debt/equity ratio) when irreversible investment faces uncertainty and when there is asymmetric information between the entrepreneur and lenders. Mark-up depends...

This paper presents an overview of the results of a research project on monetary transmission pursued by the Eurosystem, which has analyzed micro data on firms and banks in several countries of the euro area in great detail. There is strong empirical support for an interest rate channel working...