We estimate a flexible model of the behaviour of UK monetary policymakers in the era of inflation targeting based on a new representation of policymaker's preferences. This enables us to address a range of issues that are beyond the scope of the existing literature. We find a complex...

Why have skill shortages continue to persist despite increases in training and the skill levels of the workforce? We argue that technical progress has raised the demand for skilled labour to match the observed increase in supply. We provide econometric evidence in support of this hypothesis,...

In this paper, the authors study how firms react to demand shocks, examining how different aspects of flexibility shape their responses. Their main findings are that very few firms choose to adjust to price in response to a demand shock and that firms with more flexibility are more likely to...

It is widely felt that skill shortages are a serious problem in the United Kingdom. This paper investigates the causes of skill shortages. The authors' empirical work is based on job matching theory so that shortages correspond to long duration vacancies. They argue that shortages depend on...

This paper estimates a variety of models of inflation using quarterly data for the UK between 1965 and 2001. We find that the persistence of inflation is nonlinear since inflation adjusts more rapidly when prices are further from the steady state and when prices are above the steady state. We...