Large review costs lead to time-dependent price setting rules. State-dependent rules become more likely when there is an increase in: set-up costs, the variability of the equilibrium price or the efficiency loss associated with being away from equilibrium.

We describe the size and timing for comprehensive as well as decomposed measures of unemployment. We then test for and confirm a change in the structural rate of unemployment by finding structural breaks in the Okun and Beveridge relations. Finally, we employ existing empirical models to examine...

Unlike Knut Wicksell, Eli Heckscher did not believe the time had arrived for "managed money" to replace the gold standard after World War I. The war had shown that only a gold standard could bind the central bank to a time-consistent policy with reasonable price stability. Heckscher likened the...

This paper contributes to the scant empirical literature on the effects of emigration on source countries' labour markets. Using a novel dataset by Brücker et al. (2009), we investigate whether emigration from the Central and Eastern European (CEE) members of European Union (EU) during the...

Eli F. Heckscher found that in 16th century Sweden: 1) indirect barter was the most common exchange method and 2) monetary exchange was carried out with different coins, none a generally accepted medium of exchange. These findings refute the search and transaction cost models of the emergence of...

Over the past decade and a half Axel Leijonhufvud has written extensively on monetary regimes and their connection to nominal and real economic performance. Monetary regimes are important because they determine whether countries follow stable or unstable monetary policies and hence have stable...

When Sweden left the gold standard on September 27, 1931, the Swedish government declared that the aim of monetary policy should be to stabilize the domestic purchasing power of the Swedish currency, the krona. With this step, price level targeting officially became for the first time the goal...

The COVID-19 pandemic had disastrous effects on health and economic activity worldwide, including in the Euro Area. The application of mandatory lockdowns contributed to a sharp fall in production and a rise in unemployment, inducing an expansionary fiscal and monetary response. Using a uniquely...

After World War II and prior to the financial deregulation of the 1980s, monetary policy in Sweden as well as in other western European countries rested chiefly on a system of far-reaching non-market-oriented controls of credit flows and interest rates. How was monetary policy conducted in such...

The coronavirus pandemic triggered strong political action across Europe. Mandatory restrictions to increase social distancing were imposed, commonly known as lockdowns. In some cases, entire countries were virtually locked down for several weeks at a time, contributing to a very severe downturn...