In this paper we construct a dynamic stochastic general equilibrium model for a small open economy allowing for perfect capital mobility. The model incorporates price rigidities in monopolistically competitive goods and labor markets and real rigidities in the form of capital adjustment costs....

The quantitative implications of a hike in the administered prices of three petroleum products (liquefied petroleum gas, petrol and high speed diesel oil), which are vital inputs to most of the activities in the economy, are studied using a static multi-sector multi-agent applied general...

In this paper we construct a dynamic stochastic general equilibrium model for a small open economy allowing for perfect capital mobility. The model incorporates price rigidities in monopolistically competitive goods and labor markets and real rigidities in the form of capital adjustment costs....

There are still problems in handling diversity in economics. The general equilibrium model itself lacks determinacy for a generic population of economic agents. In an ourstanding contribution, Jean-Michel Grandmont (1992) argues that increasing behavioural heterogeneity makes aggregate...

An analysis of the disease of formalism in modern economics. Its manifestation in general equilibrium theory, game theory, the new classical macroeconomics and real business cycle theory. Symptoms of the disease in the current vogue for postmodernism in methodololy. The possibilities for curing...

We estimate the extent to which idiosyncratic and disaggregate macro shocks (such as regional and industry shocks) are not shared in the economy. Comparing the degree to which idiosyncratic and disaggregate macro shocks are not shared grants a deeper understanding as to why the economy lacks in...

This paper uses numerical optimisation to uncover optimal policy reaction functions for a stylised small economy model under a number of targeting regimes. These policy reaction functions are presented as feedback relationships making evident the dominant state variables in the rule.

This paper examines the incidence of worker displacement in Australia between 1984 and 1996. Similar to recent international studies a particular focus is on whether job security declined between the 1980s and 1990s. It is found that a significant, but apparently temporary, increase in the...

This paper is a study of money in overlapping generations models with cash-in-advance constraints. We first offer a brief review of different features of cash-in-advance constraint. Then we propose a general formulation and study the neutrality of money. We show that both neutrality and...