We study the effects of macroprudential policy rules in a small-open economy model in which banks effectively create credit. Banks in the model can generate new finance in the process of extending loans rather than just intermediating funds between savers and borrowers; this has been argued to...

Motivated by the increasing use of forward guidance, we consider DSGE models in which the central bank holds the policy rate fixed for an extended period of time. Private agents' beliefs about how long the fixed-rate regime will last influences current output and inflation. We estimate the...

We use a simple model of a closed economy to study the recommendations of monetary policy-makers, attempting to respond optimally to an asset-price bubble whose stochastic properties they understand. We focus on the impact which the zero lower bound (ZLB) on nominal interest rates has on the...