In the context of the U.K. government's EMU entry condition of cyclical convergence, this paper (i) provides further evidence suggesting that historically the U.K.'s business cycle has been more volatile than, and relatively independent of, the cycles in the euro-area countries; and (ii)...

This study identifies differences in the monetary policy transmission mechanism across the countries in the euro area. It is argued that part of the differences in the response of economic activity to monetary policy during the pre-EMU period, found in other studies, reflected differences in...

This paper assesses the links between money, credit, house prices, and economic activity in industrialized countries over the last three decades. The analysis is based on a fixed-effects panel vector autoregression, estimated using quarterly data for 17 industrialized countries spanning the...

Goodhart and Hoffman aim to examine causal and other links between house prices, liquidity, and activity, and this note comments on their results. One part of the mechanism is via wealth-but arguably house-price changes have little net impact on wealth, although there are collateral effects. The...

This paper aims to evaluate if frictions in credit markets are important for business cycles in the U.S. and the Euro area. For this purpose, I modify the DSGE financial accelerator model developed by Bernanke, Gertler and Gilchrist (1999) by adding frictions such as price indexation to past...

We develop a utility based model of fluctuations, with nominal rigidities, and unemployment. In doing so, we combine two strands of research: the New Keynesian model with its focus on nominal rigidities, and the Diamond-Mortensen-Pissarides model, with its focus on labor market frictions and...

We study optimal monetary policy in a New Keynesian-DSGE model where the combination of a credit channel and customer-market features in banking gives rise to counter-cyclical credit spreads. In our setting, monopolistically competitive banks set lending rates in a forward-looking fashion as...

Are Institutional and post-Keynesian economists converging on a shared approach to understanding Modern Monetary Theory (MMT)? The literature suggests growing recognition that post-Keynesians and Institutionalists share a common intellectual history, conceptual frameworks, and overlapping...

We show that actively stabilizing economic activity plays a more prominent role in the conduct of monetary policy when potential output is subject to hysteresis. We augment a basic NewKeynesian model by hysteresis in potential output and contrast simulation outcomes of this extended model to the...

Based on a novel quarterly dataset for 52 countries for the period 1970-2011, we analyze the use and cyclical properties of reserve requirements (RR) as a macroeconomic stabilization tool and whether RR policy substitutes or complements monetary policy. We find that (i) around two thirds of...