We examine fiscal and monetary policy interactions by developing a two-country open-economy model under flexible exchange rates, where overlapping generations of consumers supply labour to imperfectly competitive firms that change their prices infrequently. We show in this context that the...

Taylor rules, which link short-term interest rates to fluctuations in inflation and output, have been shown to be a good guide (both positively and normatively) to the conduct of monetary policy. As a result they have been used extensively to model policy in the context of both closed and open...

The overall aim of the research presented in this thesis is threefold: To empiricallyexamine monetary transmission to UK retail mortgage rates; to examine whyfixed versus variable rate mortgage lending differs across EU-15 countries; and to build a DSGE model which can be used for analysing...