The popular Taylor rule is meant to inform monetary policy in economies that are closed. Its main open-economy alternative, i.e., Ball's (In: J.B. Taylor (Ed.), Monetary Policy Rules, University of Chicago Press, Chicago) rule based on a Monetary Conditions Index, cannot offer guidance for the...

The most popular simple rules, due to Taylor (1993) and McCallum (1995), are both meant to inform monetary policy in economies that are closed. On the other hand, their main open economy alternative, the Monetary Conditions Index (MCI) rule of Ball (1999) is flawed for a number or reasons, not...

The most popular simple rule for the interest rate, due to Taylor, is meant to inform monetary policy in closed economies. On the other hand, its main open-economy alternative, Ball's rule based on a monetary conditions index (MCI), may perform poorly in the face of specific types of exchange...

In this paper we investigate the problem of selecting an optimal horizon for inflation targeting in the United Kingdom. Since there are two key ways of thinking about an optimal horizon, we look at optimal horizons for both of these interpretations. In addition, to see whether our results are...

The previous literature on the benefits of price level versus inflation targeting has, with some qualifications, established that price level targeting entails lower price level variance at the expense of higher inflation and output variance. This paper investigates the properties of monetary...

The output effects of 2009 fiscal expansions have been hotly debated. But the discussion of fiscal multipliers is even more relevant now that several European countries have had to quickly retract their stimulus measures in an effort to regain market confidence. Using regime-switching VARs we...

Fiscal multipliers are important tools for macroeconomic projections and policy design. In many countries, little is known about the size of multipliers, as data availability limits the scope for empirical research. For these countries, we propose a simple method—dubbed the “bucket...

This appendix provides further details on the data and the modeling strategy used in the chapter to analyze the global economic impact of demographic change (....).