We propose a model of a risky mortgage-lending market in which we take explicit account of heterogeneity in household borrowing conditions, by introducing two borrower types: one with a low loan-to-value (LTV) ratio, one with a high LTV ratio, calibrated to U.S. data. We use such framework to...

We present a two-country New Open Economy Macro model of the Austrian economy within the European Union's Economic & Monetary Union (EMU). The model includes both nominal and real frictions that have proven to be important in matching business cycle facts, and that allows for an investigation of...

We present empirical evidence on monetary transmission from estimated New Keynesian and empirical VAR models, that allow for a standard nominal interest rate shock and an inflation target shock. In response to the highly persistent inflation target shock we largely find evidence of a Neo-Fisher...