Bank managers often claim that equity is expensive relative to debt, which contradicts the Modigliani …-Miller irrelevance theorem. This paper combines dividend signalling theories and the Diamond-Dybvig bank run model. An opaque bank must … the bank. The more equity has been issued, the more liquidations are needed during bad times to pay the expected dividend …

This paper deals with the interaction of fiscal and monetary policy when the central bank is pursuing a price stability …

We investigate both the rational explosive inflation paths studied by McCallum (2001) and the classification of fiscal …

Most of the papers in the sticky-price literature are based on a log-linearization around the zero inflation steady … state, a simplifying but counterfactual assumption. This paper shows that when trend inflation is considered, both the long … results obtained by models log-linearized around a zero inflation steady state are quite misleading. Furthermore, the same is …

This paper examines recent changes in the cyclicality of euro area inflation. We estimate time-varying parameters for … become steeper since 2012. Thus, the current low level of inflation and persistently negative output gap increase the risk … that euro area inflation will stay below the monetary policy target for an extended period. …

This paper analyzes euro area and U.S. inflation dynamics since the beginning of the 1990s by estimating New Keynesian … hybrid Phillips curves with time-varying parameters. We measure inflation expectations by subjective forecasts from Consensus … results indicate that in both economic areas the inflation dynamics have steadily become more forward-looking over time. We …

of U.S. inflation and marginal cost turns out superior to the best-fitting conventional causal VAR model in forecasting … inflation. …

policy impacts inflation and real economic developments in China. The results indicate that the conduct of monetary policy in … China differs substantially from what is typical for an advanced market economy, where an independent central bank often … aims to hit an inflation target by simply controlling the target interest rate. First, China’s monetary policy toolkit is …