This paper considers a central bank with a zero inflation target and a fiscal authority with a differing objective. Situations under which the fiscal authority is able to exploit the central bank's commitment to zero inflation are examined. An example using a calibrated model shows that, in...

This article argues that the recent implementation of monetary policy in Australia has been dominated by the response to a large range of unanticipated shocks. In the process of trying to minimise the adverse effects of such shocks, considerable uncertainty has been created about likely outcomes...

This paper presents an approach for assessing the time taken by the well known reverse-shooting and forward-shooting algorithms to solve large-scale macroeconomic models characterized by saddle-path instability. We focus on a range of investment models with multi-dimensional specifications of...

This paper is concerned with the development of computationally efficient algorithms for the solution of the dynamics of macroeconomic models. The paper focuses on a particular continuous-time macroeconomic model. In the paper we exploit the model structure to improve the efficiency of solving...

This paper shows how a forward-shooting algorithm can be easily implemented using the Matlab programming language. In the paper we develop and implement a forward-shooting numerical algorithm for computing the dynamics of a small representative agent macroeconomic model when subjected to an...