We establish a class of fully nonlinear conditional expectations. Similarly to the usage of linear expectations when a probabilistic description of uncertainty is present, we observe analogue quantitative and qualitative properties. The type of nonlinearity captures the agents sentiments of...

This paper aims at resolving a major obstacle to practical usage of time-consistent risk-averse decision models. The recursive objective function, generally used to ensure time consistency, is complex and has no clear/direct interpretation. Practitioners rather choose a simpler and more...

A disturbing feature of the conventional objective function for intertemporal decisions under uncertainty is that the agent's attitudes toward intertemporal substitution and risk aversion are entangled. This paper shows that, in contrast to common perception, the two attitudes can be completely...

This paper empirically evaluates the operational performance of the McCallum rule, the Taylor rule and hybrid rules in India over the period 1996-2011 using quarterly data, with a view to analytically informing the conduct of monetary policy. The results show that forward-looking formulations of...

Several Central American (CADR) countries with independent monetary policies are strengthening their monetary frameworks and some have implemented or are moving towards inflation targeting (IT) regimes. Strengthening the monetary policy frameworks of CADR is key to improving the effectiveness of...

Since end-2001, the Government of Afghanistan (GoA) has focused on crisis management, establishing or rebuilding fundamental institutions and basic government services, and maintaining economic stability with the help of the international community. The authorities have made significant strides...

This Selected Issues paper provides a quantitative assessment of the determinants of inflation in Slovenia, and evaluates the likelihood of the Maastricht inflation criterion being met. It concludes that on the basis of currently identified policies, Slovene inflation will likely remain above...

This 2004 Article IV Consultation highlights that tighter fiscal and monetary policies in Suriname helped stabilize the exchange rate and moderate inflation pressures in 2003 and 2004. The fiscal deficit narrowed from 6.5 percent of GDP in 2002 to near balance in 2003, while a tighter monetary...

Many countries have moved towards more flexible exchange rate regimes over the last decade to take advantage of greater monetary policy autonomy and flexibility in responding to external shocks. Some reluctance to let go of pegged exchange rates persists, however, despite the benefits of...

This paper analyzes empirically differences in the size of central bank boards across countries. Defining a board as the body that changes monetary instruments to achieve a specified target, we discuss the possible determinants of a board's size. The empirical relevance of these factors is...