Most recent discussion of the relationship between the banking system and macroeconomic performance have focused on the deegree of independence of the central bank as the key variable influencing the choice between inflation and unemployment. This paper argues that the stability of the financial...

Using a structural VAR with time-varying parameters and stochastic volatility on post-WWII U.S. data, we document a striking negative correlation between the evolution of the long-run coefficient on inflation in the monetary rule and the evolution of the persistence and predictability of...

The present paper compares the performance in terms of second order accurate welfare of opportunistic non-linear Taylor rules and with respect to traditional linear Taylor rules. The macroeconomic model representing the benchmark for the analysis includes capital accumulation (with quadratic...