Most models of monetary policy specify a single rule (frequently a Taylor rule) for setting a policy interest rate based on monetary aggregates. Here I consider an economy where the government has two channels for injecting or withdrawing money from the economy: a policy of monetary transfers to...

The ABCs of RBCs is the first book to provide a basic introduction to Real Business Cycle (RBC) and New-Keynesian models. These models argue that random shocks—new inventions, droughts, and wars, in the case of pure RBC models, and monetary and fiscal policy and international investor risk...

Monetary policy implementation in a federal country requires both vertical (national and subnational governments) and horizontal (between subnational jurisdictions) institutional coordination. The optimal centralized monetary policy is blind and potentially nonheterogeneous at the subnational...