This paper characterizes welfare in a small open economy and derives the corresponding optimal monetary policy rule. It … gap and real exchange rate. In contrast to previous works, this paper demonstrates that welfare in a small open economy …

This paper characterizes welfare in a small open economy and derives the correspondingoptimal monetary policy rule. It … gap and real exchange rate. Incontrast to previous works, this paper demonstrates that welfare in a small open economy …

With non-controllable auto-regressive shocks, the welfare of Ramsey optimal policy is the solution of a single Riccati … welfare function. There is no need to simulate impulse response functions over a long period, to compute period loss functions … and to sum their discounted value over this long period, as currently done so far. Welfare is computed for the case of the …

countries can benefi t from using such a tool. We develop a welfare based analysis of whether (or, in fact, how)countries should …

credibility, the operational rule reduces amplification by avoiding overindebtedness and minimizing the welfare … implementing a budget balance rule and a debt anchor rule is non-redundant and welfare-improving. Our findings suggest that the … credibility and fiscal behaviour. While the debt anchor rule prevents the propagation of the negative effects of imperfect fiscal …

credibility, the operational rule reduces amplification by avoiding overindebtedness and minimizing the welfare … implementing a budget balance rule and a debt anchor rule is non-redundant and welfare-improving. Our findings suggest that the … credibility and fiscal behaviour. While the debt anchor rule prevents the propagation of the negative effects of imperfect fiscal …

This paper examines the welfare implications of a country joining a currency union as opposed to operating in a … to be welfare enhancing, the potential output gain must be the larger, the smaller the country, the larger the difference …

control on the determinacy region, hence higher policy flexibility with respect to the fiscal policy conduct; 2. welfare …