Since Kydland and Prescott published their famous article on rules versus discretion in 1977, the literature on the time-inconsistency problem of economic policy expanded rapidly. While much of the literature is highly technical and can seem esoteric, there is generally an underlying...

There appears to be a disconnect between the importance of the zero bound on nominal interest rates in the real-world and predictions from quantitative DSGE models. Recent economic events have reinforced the relevance of the zero bound for monetary policy whereas quantitative models suggest that...