We calibrate a standard New Keynesian model with three alternative representations of monetary policy- an optimal timeless rule, a Taylor rule and another with interest rate smoothing- with the aim of testing which if any can match the data according to the method of indirect inference. We find...

The political transition in the Arab Spring countries has been accompanied by a deterioration of economic and financial indicators like the Tunisian case. Therefore, this paper aims to get a deeper understanding the nature of the rule that reflects the behavior of the Tunisian monetary authority...

Empirical estimates of monetary policy rules suggest that the behavior of U.S. monetary policymakers changed during the past few decades. However, at the same time, statistical analyses of lagged representations of the economy, such as VARs, often have not rejected the null of structural...

A hybrid standard macro model is supplemented by an explicit analysis of bank lending, based on a five-position aggregative balance sheet. In the model's two versions credit supply is based on a leverage targeting rule or on simple optimisation, taking into account lending risks and funding...

A hybrid standard macro model is supplemented by an explicit analysis of bank lending, based on a five-position aggregative balance sheet. In the model's two versions credit supply is based on a leverage targeting rule or on simple optimisation, taking into account lending risks and funding...

The growth and deepening of financial markets entailed the expectation that the bank lending channel of monetary policy transmission would lose its importance. The paper explains why, on the contrary, the banking sector has become a major locus of origination and amplification of macro-financial...

A hybrid standard macro model is supplemented by an explicit analysis of bank lending, based on a five-position aggregative balance sheet. In the model's two versions credit supply is based on a leverage targeting rule or on simple optimisation, taking into account lending risks and funding...

Is there a link between loose monetary conditions, credit growth, house price booms, and financial instability? This paper analyzes the role of interest rates and credit in driving house price booms and busts with data spanning 140 years of modern economic history in the advanced economies. We...

We study fiscal policy in Denmark in the period 2004-2012 and compare the actual policy to counterfactual, rule-based alternatives. Given Denmark's fixed exchange rate towards the euro, it is the job of fiscal policymakers to stabilise fluctuations in output and inflation. However, we find that...

This paper presents a new solution method for dynamic equilibrium models. The proposed method approximates the solution by polynomials that zero the residual function and its derivatives at a given point x0. It is essentially a projection-type algorithm, but is significantly faster than standard...