This paper examines the impact of increased productivity on prices, output, real wage rate and balance of payments. Two alternative forms of productivity are considered: (1) cost saving for a given output level and (2) production increase without a direct decrease in employment. By making use of...

This paper has investigated the effectiveness of a forecast-based monetary policy for macroeconomic stabilization in a developing country, namely Pakistan. Using a simple New-Keynesian model and a forecast-augmented structural VAR (identified via three different strategies), we have studied the...