long run. In particular, we show that if monetary policy reacts aggressively to inflation, this supports a steady state … where inflation is close to the central bank's target. However, the same aggressive policy simultaneously favours the … inflation are lower and monetary policy is constrained by the effective lower bound. We discuss how fiscal policy can be used to …

transmission mechanisms of policy as compared to conventional models: unanticipated increases in interest rates increased inflation … and output while unanticipated increases in lump-sum taxes decreased inflation and output. Unanticipated shifts in … monetary and fiscal policies however, played no substantial role in explaining the variation of inflation and output at any …

primary surpluses can have a positively valued currency and low inflation. It also provides an example with closed …

of such factors, the starting point of this paper is to show that the major change driving household asset demand over …