In the framework of a standard overlapping generations model, it is shown that active inflation forecast targeting reinforces mechanisms that lead to indeterminacy of the monetary steady state and to countercyclical behavior of young-age consumption. The inflation forecast targeting rule which...

We study the monetary instrument problem in a model of optimal discretionary fiscal and monetary policy. The policy problem is cast as a dynamic game between the central bank, the fiscal authority, and the private sector. We show that, as long as there is a conflict of interest between the two...

Convenience goods are bought without much consideration or effort on the part of the consumer. Buyers don't try to get the best bargain when purchasing individual convenience items. Instead, they adapt their store choice habits so that they can expect, on average, good value for money in the...