The author surveys recent articles on the costs and benefits of price-level targeting versus inflation targeting, focusing on the benefits and costs of price-level targeting as a tool for stabilization policy. He reviews papers that examine how price-level targeting affects the short-run...

Modern business cycle theory involves developing models that explain stylized facts. For this strategy to be successful, these facts should be well established. In this paper, we focus on the stylized facts of international business cycles. We use the generalized method of moments and quarterly...

We build a model of optimal time-consistent public spending in a dynamic general equilibrium model of the business cycle. We analyze the welfare properties of optimal public spending and characterize the optimal response of spending to exogenous economic shocks. <P> Nous analysons les dépenses...</p>

We study a version of the neoclassical growth model in which shocks to both aggregate productivity and the depreciation of capital generate fluctuations around the steady-state growth path. Depreciation shocks induce an inverse comovement between average labor productivity and hours worked. When...

We examine the dual role of labor adjustment costs and staggered wage contracts as endogenous propagation mechanisms. We show that a dynamic general equilibrium model which combines these two features explains the autocorrelation functions of output growth and nominal wage growth, as well as the...

We consider the effects of fiscal spending shocks in a real business model when a portion of government spending is endogenized and chosen to maximize the utility of the representative private agent. Endogenous spending partially neutralizes the effects of both exogenous fiscal spending shocks...

Nombreux sont ceux qui croient que l'approche du cycle économique initiée par Lucas, Kydland et Prescott a pour objectif fondamental de doter les modèles macroéconomiques de fondements microéconomiques solides alors que l'approche IS-LM- courbe de Philipps se démarquerait par son souci et...

We build a dynamic general equilibrium model of a semi-small open economy in which staggered wage contracts are the only source of nominal rigidity. The model is capable of generating highly variable real and nominal exchange rates while predicting relative variabilities of prices and...

This paper explores the quantitative link between export-promoting commercial policies and economic growth. We build and calibrate a dynamic general equilibrium model of a small developing economy. The economy's equilibrium is suboptimal due to monopolistic competition in the manufacturing...

We extend the Hansen and Prescott (1991) method for the numerical computation of equilibria of dynamic business cycle models in which there are two sets of agents who play a dynamic Stackelberg game. Such models have application to analysis of issues of optimal government policy in which the...