We calibrate a standard New Keynesian model with three alternative representations of monetary policy- an optimal timeless rule, a Taylor rule and another with interest rate smoothing- with the aim of testing which if any can match the data according to the method of indirect inference. We find...

In this paper we show that the macroeconomic effects of a transient interestrate peg can be significantly dampened when the peg is perceived to be imperfectly credible by the private sector. By doing so, we provide a solution to what has become known as the "forward guidance puzzle". This is the...

This paper empirically applies the New Keynesian model for monetary policy analysis in a small open economy with a fixed exchange rate. Official reserves are included in the interest rate rule to account for the constraint that these impose on monetary policy when the exchange rate is fixed....

Any attempt to model monetary policy in China has to take into account two ‘specifics’ of the Chinese monetary policy: the reliance on several operational instruments, both quantitative (open market operations, discount rate, reserve requirement) and qualitative (selective credit allowances,...

The paper aims at showing that one of the main channels by which the US 2007 financial crisis became a real and global economic crisis is the 'confidence channel', i.e. that the financial crisis affected firms, banks and households’ expectations and confidence, thus leading to what they...

This paper presents the structure and the main properties of Three-ME. This new model of the French economy has been especially designed to evaluate the medium and long term impact of environmental and energy policies at the macroeconomic and sector levels. To do so Three-ME combines two...

This paper describes a small macro-model for the euro area. It has been built using Eurostat quarterly data and is aimed at improving the current tools used for forecasting and analysing the economy of the area. Some key data, such as capital stock or households disposable income, have been...

The article deals with the results of econometric model building for Russian and Belorussian economic development using the LAM-3 methodology. LAM-3 is the most recent version of the Long-run Adjustment Model that is used for quarter-to-quarter modeling and forecasting to show the economic...

We show that the New Keynesian sticky price model with a cost-push shock and time-varying volatilities of driving forces can reproduce the behavior of the U.S. yield curve in the post-World War II period. Furthermore, we examine how the yield data affects the estimation of time-varying...