The proof of the theorem of existence of the ruptures, namely the proof of maximality, is improved. The theorem may be used in economics and explain the well-known problems such as Allais’ paradox. Illustrated examples of ruptures are presented.

This paper provides a comprehensive analysis of the relative performance of inflation targeting, price level targeting, and hybrid targeting of them in a simple three-period steady state to steady state economy facing transmission lag, and derives optimal policies implementing commitment...

Unemployment Accounts (UA) are mandatory individual saving accounts that can be used by governments as an alternative to the Unemployment Insurance (UI) system. I study a two tier UA-UI system where the unemployed withdraw from their unemployment account until it is exhausted and then receive...

We study monetary policy at the ZLB in a traceable three-period model, in which price-level targeting emerges endogenously in the welfare function. We characterize optimal price-level forward guidance under discretion and commitment. Potentially non-monotonic discretionary welfare losses are...

A common assumption in the Schumpeterian growth literature is that the innovation size is constant and identical across industries. This is in contrast with the empirical evidence which shows that: (i) the innovation size is far from being identical across industries; and (ii) the size...

I investigate optimal monetary policy in the sticky information model of price adjustment within a New Keynesian macroeconomic framework. The model is solved for optimal policy, and welfare implications of three alternative monetary policy regimes: unconstrained policy, price-level targeting and...