Is a fair degree of equality among economic agents with respect to income and wealth compatible with an optimal level of economic growth - or does initiatives promoting equality restrain growth, or in the opposite, does initiatives promoting growth restrain equality? These are questions that...

Most studies of optimal monetary policy under learning rely on optimality conditions derived for the case when agents have rational expectations. In this paper, we derive optimal monetary policy in an economy where the Central Bank knows, and makes active use of, the learning algorithm agents...

The purpose of this paper is to examine whether the level of inflation matters for the persistence of output growth when shocks to output have asymmetric effects. The idea that inflation could have such threshold effects is worth investigating because some authors have suggested that a low...

There are two competing theories of balance of payments: the Keynesian and the monetary theories. Each of the two approaches provides distinct explanations on how the determinants of the balance of payments could lead to equilibrium and disequilibrium of the balance of payments account and both...

The recent literature on monetary policy has questioned the use of linear Phillips curves and the assumption of a constant NAIRU. In this paper we explore monetary policy considering different shapes of the Phillips curve and an endogenous NAIRU. The NAIRU is, as recent papers suggest, made...

Stochastic models with economy-wide shocks imply that the welfare costs of aggregate volatility are negligible and contribute little to explaining the equity premium puzzle. Motivated by this failure, this paper introduces idiosyncratic shocks. Drawing on empirical evidence suggesting that the...