We propose a price-setting model which helps reconcile microeconomic evidence of relatively frequent and large price changes with persistent real effects of monetary shocks. In our model, both price adjustments and the gathering of some types of information are costly, requiring the payment of a...

In this paper, we show that traditional comparisons of Mean Squared Prediction Error (MSPE) between two competing forecasts may be highly controversial. This is so because when some specific conditions of efficiency are not met, the forecast displaying the lowest MSPE will also display the...

The short-term economic benefits of oil and gas production from shale for the U.S. economy have been widely discussed, but the long-term effects remain unclear. These long-run impacts likely depend upon the degree to which such oil and gas production can impact growth in capital per worker or...

During the 1980s and the 1990s, private investment in the Middle East and North Africa (MENA) has on average shown a decreasing or stagnant trend. This contrasts with the situation of the Asian economies, where private investment has always been more dynamic. In this paper, it is empirically...

The paper, written for the centennial celebration of Kalecki’s birth, considers the legacy for modern macroeconomics of Kalecki’s theory of income determination, which is reconstructed in its analytical constituent parts, referring in detail to the original sources. Kalecki’s...

This paper investigates the effects of open-market operations on the distributions of assets and prices. It offers a theoretical framework to incorporate multiple asset holdings in a tractable heterogeneous-agent model. This model features competitive search, which produces distributions of...

It is found that commodity price shocks largely affect the mining, construction and manufacturing industries in Australia. However, the financial and insurance sector is found to be relatively unaffected. Mining industry profits and nominal output substantially increase in response to commodity...