This paper incorporates a debt contracting problem with asymmetric information into a standard monetary business cycle model. The model incorporates a limited participation assumption in order to induce a liquidity effect of monetary shocks and propagate monetary disturbances. The model economy...

To evaluate the effectiveness of targeting monetary policy strategies in a small open economy, we develop a dynamic optimizing model calibrated to recent Korean data. We then explore the consequences of alternative specifications of the loss function for society and the central bank, with...

While the convergence hypothesis implies that poor countries or regions tend to grow faster than rich ones, it can be reformulated such that poor countries or regions tend to have higher rates of return on their capital than rich ones but their rates of return would ultimately decline and...