We estimate an alternative type of monetary policy rule, termed Calvo rule, according to which the central bank is assumed to target a discounted in?nite sum of future expected in?ation. Compared to conventional in?ation forecast-based rules, which are typically of the Taylor-type with discrete...

The relevance of direct supply-side effects of monetary policy in a New Keynesian DSGE model is studied. We extend a model with several nominal and real frictions by introducing a cost channel of monetary transmission and allowing for non-separability of money and consumption in the utility of...

In 1997, the Bank of England was granted operational responsibility for setting interest rates to meet a Government inflation target of RPIX 2.5 percent. As part of the shift towards independence, operational decisions on monetary policy were delegated to a Monetary Policy Committee. Using...

Building on Blinder and Wyplosz (2005) this paper presents a formal mechanism which potentially explains how autocratically collegiate, genuinely collegiate and individualistic monetary policy committees (MPCs) are able to reach a consensus. Drawing on the theory of Markov chains, I adopt a...

I examine the propensity of Bank of England Monetary Policy Committee (BoEMPC) members to cast dissenting votes. In particular, I compare the type and frequency of dissenting votes cast by socalled insiders (members of the committee chosen from within the ranks of bank staff) and outsiders...

This paper explores the similarity of the underlying economic problems that lead to the establishment of (a) independent central banks to operate national monetary policies and (b) independent regulatory agencies for telecommunications and other utility service industries. We show that, in both...

We present a model of transnational terrorism where two countries, home and foreign, face a terrorist threat based in the foreign country. The home country chooses how much to invest in defending itself or in reducing terrorist resources either indirectly by subsidising the foreign country or by...

This note reassesses the basic result in Mukhopadhaya (2003) that, when jurors may acquire costly signals about a defendant’s guilt, with a larger jury size the probability of reaching a correct verdict may in fact fall, contrary to the Condorcet Jury Theorem. We show that if the jurors...

We reassess the gains from monetary policy coordination within the confines of the canonical NOEM in the light of three issues. First, the literature uses a number of cooperative and non-cooperative equilibrium concepts that do not always clearly distinguish commitment and discretionary...

The paper examines the interrelationship between fiscal and monetary policy in a two-country monetary union. The worst scenario occurs when an independent central bank (CB sets the nominal interest rate and responds to rising government debt/GDP ratios by monetisation. The result is high...