This paper compares the P-bar model of price adjustment with the currently dominant Calvo specification. Theoretically, the P-bar model is more attractive as it depends on adjustment costs for physical quantities rather than nominal prices, while incorporating a one-period information lag....

For introductory presentation of issues involving identification and estimation of simultaneous equation systems, a natural vehicle is a model consisting of supply and demand relationships to explain price and quantity variables for a single good. One would accordingly expect to find in...

It is argued that learnability/E-stability is a necessary condition for a RE solution to be plausible. A class of linear models considered by Evans, G.W. and Honkapohja, S. [2001. Learning and Expectations in Macroeconomics, Princeton University Press.] is shown to include all models of the form...

The paper reconsiders the role of money and banking in monetary policy analysis by including a banking sector and money in an optimizing model otherwise of a standard type. The model is implemented quantitatively, with a calibration based on US data. It is reasonably successful in providing an...

Recent analysis by Clarida, Galí, and Gertler (1999), Jensen (2002), Svensson and Woodford (1999), Walsh (2002), and especially Woodford (1999a, 1999b, 2000) has been highly productive in advancing the profession’s understanding of optimal monetary policy. Specifically, these papers emphasize...