Motivated by the increasing use of forward guidance, we consider DSGE models in which the central bank holds the policy rate fixed for an extended period of time. Private agents' beliefs about how long the fixed-rate regime will last influences current output and inflation. We estimate the...

We study the effects of macroprudential policy rules in a small-open economy model in which banks effectively create credit. Banks in the model can generate new finance in the process of extending loans rather than just intermediating funds between savers and borrowers; this has been argued to...