Economists have long recognized that the time costs of using different forms of money can be significant and potentially affect the type of media of exchange used. Banks and retailers recognize these costs as well, and market transponder devices to pay for tolls, food and gas as a way to...

We study the implications of uncertainty for inflation targeting. We apply multiplicative uncertainty to a standard forward looking model and demonstrate Brainard's attenuation effect. But the result as monetary authorities become naturally more cautious at the same time monetary objectives are...

This paper investigates the question of whether a transition to a low-inflation environment, induced by a shift in monetary policy, results in a decline in exchange rate pass-through to consumer prices. Our study distinguishes itself from previous empirical work in that we pay particular...

Pioneering work of modelling financial anxieties was given by Kimura et al (1999) as psychological change of people due to financial shocks. Since they regressed financial position (easy or tight) by nonstationary interest rate, their results exhibit high peaks not only in financial crisis...

In this paper we establish a link between the volatility of oil price shocks and a positive expected value of inflation in equilibrium (inflation premium). In doing so, we implement the perturbation method to solve up to second order a benchmark New Keynesian model with oil price shocks. In...

Centralized exchange has a worst-case size-complexity many orders of magnitude lower than decentralized monetary exchange. As long as its computational limits are not exceeded, therefore, a centralized exchange may approach Pareto-efficiency more rapidly than a decentralized exchange. Wealth...

This paper estimates simple regime-switching rules for monetary policy and tax policy over the post-war period in the United States and imposes the estimated policy process on a standard dynamic stochastic general equilibrium model with nominal rigidities. The estimated joint policy process...

The paper deals with non-linear dynamics of an extended Kaldor model including not only production and capital stock dynamics but also the interest rate and price dynamics with an adaptive expectation of inflation. Presented structure of the model is described by the system of the five...

We study the effects of optimized monetary policy in a semi-structural, estimated small open economy in situations where the policymaker has either complete or less than complete confidence in the model being free from misspecification errors. We use the robust control techniques developed by...