The authors compare estimation of spot and implied forward interest rates from Swedish Treasury bill and government bond yields with two functional forms, the simple Nelson and Siegel (NS) and the complex Longstaff and Schwartz (LS). Monetary policy rather than financial analysis is in focus,...

International transmission of stochastic fiscal policy disturbances is examined in a two-country, general equilibrium framework, with possible excess supply equilibria with underutilization of resources. Nominal goods prices are sticky, although optimally set by firms in monopolistic...

Expected rates of devaluation for the French franc/Deutsche mark exchange rate during the EMS are estimated using the 'drift adjustment' method. Exchange rates within the band display strong mean reversion. The adjustment term, the expected rate of depreciation within the band, is often of the...

Previous analyses of the implementation of inflation targeting are extended to monetary policy responses to different shocks, consequences of model uncertainty, and effects of interest rate smoothing and stabilization. Model uncertainty, output stabilization, and interest rate stabilization or...