). We show that incorporating forward-looking expectations into standard open economy structural VAR models resolves these …

the flexible price equilibrium. In this paper, we develop a twosector two-good closed economy new Keynesian model to study …

In closed or open economy models with complete markets, targeting core inflation enables monetary policy to maximize … is high. We develop an open economy model with incomplete financial markets to show that headline inflation targeting …

aggregate welfare when the economy is hit by positive shocks to nontradable goods productivity or foreign interest rates. Fiscal …