We model the two types of tenders used by the European Central Bank in its open market operations. We assume that the ECB minimises a loss function that depends on the difference between the interbank rate and a target rate that characterises the stance of monetary policy. When the loss function...

This article examines the role of money in a small-scale dynamic general equilibrium model of the euro zone estimated by maximum likelihood. The model allows for both intertemporal and intratemporal non-separability in preferences. We find, first, that real balances do not affect the marginal...

The purpose of this paper is to test for the presence of habit formation in consumption decisions using household panel data. We apply the test proposed by <link rid="b27">Meghir and Weber (1996)</link> to a Spanish panel data set in which households are observed for up to eight consecutive quarters. This temporal...