The celebrated Taylor rule provides a simple formula that aims to capture how the central bank interest rate is adjusted as a linear function of inflation and output gap. However, the rule does not take explicitly into account the zero lower bound on the interest rate. Prior studies on interest...

We study discretionary equilibrium in the Calvo pricing model for a monetary authority that chooses the money supply, producing three main contributions. First, price‐adjusting firms have a unique equilibrium price for a broad range of parameterizations, in contrast to earlier results for the...

As Korea's household debt has increased rapidly since the mid-2000s, concerns that its economy's hard-wired leveraging may negatively impact economic activity have grown. Calls are being made for policy actions to return the economy to its long-run trend. Housing preferences and monetary shocks...

This paper estimates the expectation-augmented Phillips curve, which explains inflation dynamics, in Korea. The phenomenon of low inflation in Korea has been going on for quite some time, in particular since 2012. During the Covid-19 crisis, due to low inflation expectations the operation of...

This paper replicates the main analysis of Svensson (2015) with some expansion to the original analysis, mainly for the United States. Overall, the replication exercise successfully confirms the conclusions of Svensson (2015). In both Sweden and the United States, empirical evidence sup- ports...

There is no consensus over the importance of "global forces" on inflation. This study explores the role of structural breaks in the inflation process, and their timing, whether it is common across countries, and the extent to which "global forces" are relevant. Three conclusions stand out....

This paper estimates a nonlinear augmented New Keynesian Philips Curve for Nigeria using the Smooth Transition Regression model for the period 1995Q1 to 2018Q2. The empirical evidence reveals the existence of two inflation regimes during the period under review. Food inflation, energy inflation,...

In the last months, the world's economies were confronted with the largest economic recession since the Great Depression. The occurrence of a worldwide financial market meltdown as a consequence originally stemming from of the crisis in the US subprime housing sector was only prevented by...