Monetary policy transmission lags create credibility problems for the inflation-targeting policy maker who acts under discretion. We show that if prices react to monetary policy with a longer lag than output, the welfare maximizing inflation-targeting policy implies no policy stabilization of...

A common finding in the literature is that forward guidance cannot be credible under discretionary policy as long as the zero lower bound is an one-off event. However, this is not the case when recurring episodes of zero interest rates are possible. In this paper, we contribute to this new...

In this paper we study the role of the exchange rate in conducting monetary policy in an economy with near-zero nominal interest rates as experienced in Japan since the mid-1990s. Our analysis is based on an estimated model of Japan, the United States and the euro area with rational expectations...

We use high-frequency intraday interest rate data to measure euro area monetary policy shocks on the days of ECB interest rate announcements between 2002 and 2013. In line with Gürkaynak et al. (2005), we look at monetary policy shocks along two time dimensions: one related to the current level...

Understanding differences in business cycle phenomena between Emerging Market Economies (EMEs) and industrialized countries has been at the center of recent research on macroeconomic fluctuations. The purpose of this paper is to investigate the importance of certain credit market imperfections...

In this paper, we discuss the consequences of imperfect information about financial frictions on the macroeconomy. We rely on a New Keynesian DSGE model with a banking sector in which we introduce imperfect information about a limited enforcement problem. Bank managers divert resources and can...

Islamic macro models are two categories. The first was inspired by Mannan (1970), Siddiqui (1981, 2006) and Chapra (1985, 1996). It is elaborated by Khan and Mirakhor (1994), Iqbal and Mirakhor (2011), in addition to Mirakhor and Zaidi (2007). It uses a pure equity-based system, keeping the...

Both the United States and the United Kingdom publish data on the balance sheet of Households and Non-profit organisations. Eurostat is studying the issue. The time series provide a unique tool to assess whether collectively the individual households are getting richer or poorer. They allow to...

Both the United States and the United Kingdom publish data on the balance sheet of Households and Non-profit organisations. Eurostat is studying the issue. The time series provide a unique tool to assess whether collectively the individual households are getting richer or poorer. They allow to...

Economists may need to change their tools of analysis from analysing income and expenditure contributors (GDP) to asset value contributors -the net worth levels of individual households-. Assessment of the latter requires a balance sheet analysis. Why; because the level of individual...