This paper investigates how economic openness affects the responsiveness of aggregate supply (AS) and aggregate demand (AD). We show that AD is flatter in more-open economies when economic openness is positively associated with the slope of AS (Romer, 1993)

This paper investigates the relation between economic openness and the aggressiveness of monetary authorities to ensure price stability. In a sample of 114 countries for the period 1949-2001, we find that more open economies tend to have more aggressive monetary policies which results in less...

The book's central theme is that a policymaker's role is to enhance the public's ability to co-ordinate their price information, price expectations, and economic activities. This role is fulfilled when policymakers maintain inflation stability. Inflation persists less when an implicit or...

We investigate the effectiveness of an aggressive anti-inflation monetary policy on the ability of agents to achieve rational expectations equilibrium (REE) forecasts of inflation. An aggressive anti-inflation policy includes a willingness to respond more forcefully to deviations from an...