I characterize the constrained efficient- and -time-invariant optimal monetary policy under full commitment for a small open economy with a commodity sector and financial frictions through a recursive Ramsey policy approach. In response to correlated commodity price and world activity shocks,...

Central banks around the world are tightening monetary policy in response to a global surge in inflation not seen since the 1970s. This synchronization of global interest rate hikes and further increases expected by markets, illustrated in figure 1, have raised concerns about adverse...

The lack of inflation in 2020 despite the fastest money growth rates since World War II at first seems puzzling for anyone believing that money still matters. The monetary expansion merely offset the effects of declining velocity of money and reduced spending associated with the lockdowns,...

Recursively identified vector autoregressive (VAR) models often lead to a counterintuitive response of prices (and output) shortly after a monetary policy shock. To overcome this problem, we propose to estimate the VAR parameters under the restriction that economic theory is not violated, while...

Central banks around the world are tightening monetary policy in response to a global surge in inflation not seen since the 1970s. This synchronization of global interest rate hikes and further increases expected by markets, illustrated in figure 1, have raised concerns about adverse...

According to many studies, many developing as well as developed economies have found a significant relationship between interest rate and economic growth. This paper studies the interaction between Interest rate and the Economic growth of Indian economy. We analyzed the related data connecting...

A number of central banks in advanced countries use ranges, or bands, around their inflation target to formulate their monetary policy strategy. The adoption of such ranges has been proposed by some policymakers in the context of the Fed and the ECB reviews of their strategies. Using a standard...