A panel of forecasts may be defined to be in consensus when individual forecasters place identical weights on a common latent variable. We suggest this definition and formulate a dynamic latent-variable model to test for consensus. This method also tests whether it is valid to use the mean...

The effective conduct of monetary policy is complicated by uncertainty about the level of potential output, and thus about the size of the monetary policy response that would be sufficient to achieve the targeted inflation rate. One possible response to such uncertainty is for the monetary...

There has been a considerable recent debate on the causes of low pass-through from exchange rates to consumer prices. This paper develops a simple model of a small open economy in which exchange rate pass-through is determined by the frequency of price changes of importing firms. But this, in...

Walsh (2003) argued that U.S. monetary policy can be described as following a "speed limit" policy. Here I show that this provides an explanation for the apparent interest rate smoothing present in central bank policy.

Recent world events have cast a spotlight on what role, if any, discriminatory screening should play in aircraft security. This paper argues that if observable characteristics indicate differing probabilities of committing acts of terrorism, then following a non-discriminatory screening policy...

This paper reviews the role of long-term interest rates in international monetary transmission and related policy challenges in the wake of exceptionally easy US monetary policy. It employs a panel VAR model to examine the impact of a very low US term premium on relatively small open Asian...

Recent macroeconomic experience has drawn attention to the importance of interdependence among countries through financial markets and institutions, independently of traditional trade linkages. This paper develops a model of the international transmission of shocks due to interdependent...

In this paper we examine how monetary policy should respond to nominal exchange rates in a New Keynesian open economy model that allows for a non-trivial role for sterilised intervention. The paper develops the argument against the backdrop of the evolving policy-making environment of Asian...

Limited access to the formal financial sector is a common feature of the economic environment in many emerging market and developing economies. In this paper, we examine how the level of financial inclusion affects welfare-maximising monetary policy. Our theoretical framework is based on Galí,...