This paper analyses the impact of asymmetric preferences with respect to inflation and output by policymakers on interest-rate reaction functions and test for their existence. A modified New Keynesian framework which makes it possible to identify the dominant type of asymmetry is developed and...

Since Taylor's 1993 paper researchers have devoted a lot effort to estimation of monetary policy rules. Taylor showed that a simple central bank reaction function, with the interest rate as monetary policy instrument and inflation and output gap as explanatory variables, mimics the Fed funds...

Redistribution differs widely across countries, but our understanding of why this is the case is limited. In democracies, the extent of redistribution should ultimately reflect citizens’ preferences. We measure preferences for redistribution in six developed countries through internationally...