The last decades have witnessed major progress in both monetary policy theory and practice, with broad academic consensus on the desirability of monetary policy rules and ongoing research on their exact specification. Typically, the analysis is carried out in a New Keynesian framework with...

Macroeconomists are increasingly using a New IS-LM model to discuss the economy's response to shocks and the design of monetary policy rules. This new model has better microfoundations than earlier IS-LM models and explicitly incorporates expectations about future economic conditions. Price...

In this paper we investigate the possible effects of fiscal tightening in Hungary from two perspectives. First, simulations in an estimated neo-Keynesian model are used to characterise the effects of different scenarios for fiscal consolidations. We show that the composition of fiscal shocks is...