The 'Brainard conservatism principle' states that the optimal monetary policy rule should be less aggressive when uncertainty about parameters is taken into account. However, this principle is not fully general and may be reversed in some cases. This paper examines the implications of parameter...

The VAR monetary literature has long exhibited a 'price puzzle': after a positive innovation on the policy interest rate, the price level tends to increase rather than to decrease. This paper shows that introducing fiscal data (primary surplus and net debt) proves fruitful in a VAR model also...