In the New Keynesian model, even if the central bank does not have an over-ambitious output target, policy under discretion leads to an inefficiency known as the stabilisation bias. In this paper, using a New Keynesian model, we explore and quantify how various uncertainties such as an...

Wage posting models of job search typically assume that firms can commit to paying workers the posted wage. This paper investigates the consequences of relaxing this assumption. Under "downward" commitment firms can commit only to paying at least their advertised wage. We show that wage posting...

When the central banker’s loss function is asymmetric, changes in the volatility of inflation and/or unemployment affect equilibrium inflation. This suggests that changing macroeconomic volatilities may be an important driving force behind trends in observed inflation. Previous evidence, which...

There exists a large literature on the optimal deterrence of crime. Within the literature, however, there exists a controversy over what the appropriate criterion to determine optimality should be. While the most popular method is that of maximization of a utilitarian welfare function, another...

Statistics that measure labor market activity, such as employment and unemployment, are often interpreted in the press and by politicians as measures of economic performance and social well-being. Discussions that focus on cross-country comparisons of unemployment, for example, seem to be based...

In this paper, we investigate the extent to which changes in U.S. labour market policy in the 1980s may have contributed to the emergence of an unemployment rate gap between Canada and the United States.

This paper considers Value at Risk measures constructed under a discrete mixture of normal distribution on the innovations with time-varying volatility, or MN-GARCH, model. We adopt an approach based on the continuous empirical characteristic function to estimate the param eters of the model...

Building on recent advances in the theory of the optimal timing of investment under uncertainty, this paper proposes a stylized theoretical model to study an individual's optimal migration strategy. It shows that, as a result of following the optimal strategy, the individual may choose to delay...

In this paper we develop and estimate a traval-cost model of demand for recreational camping in the provincial parks of the Province of Ontario, Canada, in the spirit of the Vaughan-Russell contribution.