This paper explores the macroeconomic consequences of preferences displaying asubsistence point. It departs from the existing related literature by assuming thatsubsistence points are specific to each variety of goods rather than to the compositeconsumption good. We show that this simple feature...

In the new situation with flexible exchange rates, monetary policy in Europe will have to rely more on indicators than previously under fixed rates. One of the potential indicators, the forward interest rate curve, can be used to indicate market expectations of the time-paths of future short...

Policy rules that are consistent with inflation targeting are examined in a small macro-econometric model of the US economy. We compare the properties and outcomes of explicit "instrument rules" as well as "targeting rules". The latter, which imply implicit instrument rules, may be closer to...

Policy rules that are consistent with inflation targeting are examined in a small macroeconomic model of the US economy. We compare the properties and outcomes of explicit instrument rules' as well as targeting rules.' The latter, which imply implicit instrument rules, may be closer to actual...