This paper presents a dynamic general equilibrium model that incorporates firm entry under credit rationing. Goods-producing firms in this model are bank dependent in the sense that they have no choice but to borrow funds from banks to cover labor wages that must be paid in advance of...

This study examines whether central bank transparency about views of future productivity growth contributes to stabilizing macroeconomic fluctuations. In a standard New Keynesian model, the central bank and private agents make their subjective estimates on the persistence of productivity growth....

We examine the expectational stability (E-stability) of rational expectations equilibrium (REE) in a standard New Keynesian model in which private agents refer to the central bank's forecast in the process of adaptive learning. To satisfy the E-stability condition in this environment, the...