A central finding of the previous monetary policy research is that commitment to a policy rule results in substantial welfare gains. In this paper, I reevaluate the value of monetary policy commitment in an environment where monetary and fiscal policies are conducted by separate branches of the...

Many empirical studies provide evidence that macroeconomic policies as well as capital flows exhibit procyclical characteristics in developing economies. In particular Kaminsky et al. [2004. When it rains, it pours: Procyclical capital flows and macroeconomic policies. NBER Macroeconomics...

Many empirical studies find robust evidence that marginal cost of production directly depends on the nominal rate of interest. This relationship induces a cost channel for monetary policy transmission. Although the empirical literature provides ample evidence for a cost channel, studies that...