-run concept like the natural rate of unemployment. We examine what effect uncertainty has on the use of NAIRU in policy …. Uncertainty about the level of NAIRU does not imply that monetary policy should react less to the NAIRU gap. However, uncertainty … about the effect of the NAIRU gap on inflation does require adjustments to the policy reaction function. Also, as in …

its money demand properties and determine the optimal long-run inflation rate that trades off the New Keynesian distortion …

In this research, we provide new empirical evidence on the importance of time-varying uncertainty for the exchange rate … and the excess return in currency markets. Following an increase in monetary policy uncertainty, the dollar exchange rate … general-equilibrium theory of exchange rate determination based on the interaction between monetary policy and time …

We study the design of optimal monetary policy under uncertainty in a dynamic stochastic general equilibrium models. We … use a Markov jump-linear-quadratic (MJLQ) approach to study policy design, approximating the uncertainty by different … a benchmark New Keynesian model, analyzing how policy is affected by uncertainty, and how learning and active …

dominate, in that public releases increase uncertainty about fundamentals. In some cases, public releases can create or …

setting, an increase in uncertainty about future shocks causes significant contractions in the economy and may lead to non … outcomes. Fluctuations in uncertainty and the zero lower bound help our model match the unconditional and stochastic volatility …

react in opposite directions to a shock to the real economy, and the response of inflation to uncertainty shocks vary across …We investigate the relationship between uncertainty about monetary policy and its transmission mechanism, and economic …-order effect on their dynamics. The data favors a model with two unspanned volatility factors that capture uncertainty about …

uncertainty, so-called Markov jump-linear-quadratic systems extended to include forward-looking variables. The form of model … uncertainty our framework encompasses includes: simple i.i.d. model deviations; serially correlated model deviations; estimable … regime-switching models; more complex structural uncertainty about very different models, for instance, backward- and forward …

output-inflation volatility frontier of each model for alternative specifications of the interest rate rule, subject to an …-difference of the federal funds rate responds to the current output gap and the deviaition of the 1-year average inflation rate from … inflation deviation fromt target. Furthermore, first-difference rules generate essentially the same policy frontier as more …

We study a novel policy tool—interest rate uncertainty—that can be used to discourage inefficient capital inflows and … identify the trade-offs faced in navigating between external balance and price stability. The interest rate uncertainty policy … discourages short-term inflows mainly through portfolio risk and precautionary saving channels. A markup channel generates net FDI …