This note summarises the results of an exercise in estimating investment functions for inclusion in a small-scale econometric model of the economy. The overall exercise in model-building is a joint project involving three staff from Economic Analysis, Research and Publications. Its aim is to...

Similar to the US Federal Reserve and the European Central Bank, most central banks use the day-to-day interest rate on the inter-bank money market as their operational target. Using modern monetary instruments central banks can control very short-term interest rates. However, the problem is...

The most popular method of measuring structural budget balances is the “gaps plus elasticities” approach. Abtract: In this paper, it is argued that the idiosyncratic features of an economy need to be accounted for properly when seeking to achieve good estimates of structural budget balances...

Over the past decade the growth of trading activity in financial markets, numerous instances of financial instability, and a number of widely publicised losses on banks' trading books have resulted in a re-analysis of the risks faced, and how they are measured. The most widely advocated approach...

Recent years have seen a proliferation in research aimed at assessing monetary policy rules using macroeconomic models built from explicit micro-foundations. In many versions of these models, pricing behaviour is described by a ``new-Keynesian Phillips curve,'' which relates inflation to...

This paper presents a model of the Irish housing sector which has been created to nest within the Irish block of the ESCB multi-country model which is maintained in the Economic Analysis Research and Publications Department. The model consists of a demand and supply side and results from it are...

Output per worker can be expressed as a function of technological efficiency and of the capital-output ratio. Because technology is exogenous in the Solow model, all of the endogenous convergence dynamics take place through the adjustment of the capital-output ratio. This paper uses the...

Can factor market competition, given pertinent incentives, bring about efficiency gains, or is privatisation necessary? We assess the impact of factor market competition on Chinese state-owned enterprises' productivity in a laboratory-like setting. The empirical evidence suggests that...

The paper constructs various core inflation measures. These include various trimmed means using highly disaggregated data and a structural VAR estimate of core inflation for Ireland. The ability of these core inflation measures to forecast future headline inflation is compared using a simple...

This paper examines whether monetary authorities should aim for low inflation or price stability. It first outlines and assesses many of the costs of inflation. Some of these, such as the distortionary effect upon the tax system, have been shown to involve significant welfare costs, even at very...