Monetary policy is modeled as governed by a known rule, except for a time-varying target rate of inflation. The variable target is taken as representing either discretionary deviations from the rule, or as the outcome of a policymaking committee that is unable to arrive at a consensus....

This paper uses a DSGE model to examine the effects of an expansion in government spending in a liquidity trap. If the liquidity trap is very prolonged, the spending multiplier can be much larger than in normal circumstances, and the budgetary costs minimal. But given this "fiscal free lunch,"...

This paper investigates the impact of the asymmetric shocks within a currency union in a framework that takes account of the zero bound constraint on policy rates, and also allows for constraints on fiscal policy. In this environment, we document that the usual optimal currency argument showing...

a speech at the The Brimmer Policy Forum, Allied Social Science Associations Annual Meeting, Denver, Colorado, January 8, 2011

a speech at the Committee for Economic Development 2010 International Counterparts Conference, New York, New York, December 1, 2010

In a two-country DSGE model, the effects of foreign demand shocks on the home country are greatly amplified if the home economy is constrained by the zero lower bound for policy interest rates. This result applies even to countries that are relatively closed to trade such as the United States....

a speech at the Annual Meeting of the National Association for Business Economics, Denver, Colorado, October 11, 2010

Remarks at the National Association of Business Economists, Washington, DC, March 13, 1996

remarks at the Economic Club of New York, New York, New York, April 11, 2011