This paper compares interest rate and money supply rules. The analysisis conducted within a rational expectations macro model that incorporates flexible prices and informational frictions. With differential information, interest rate targets can affect the information content of market prices...

This paper analyzes the effects of stochastic taxes on production in simple stochastic growth model. In so doing, the paper explicitly examines the importance of uncertainty on the decisions of individual agents. This importance is emphasized by comparing economic outcome to various realizations...