This paper investigates the relationship between trade openness and the sacrifice ratio for 126 countries from 1973 to 2007. The instrumental variable quantile regression method is used to explain heterogeneous impact of openness on sacrifice ratio, where openness is endogenous. Empirical...

We build a two-country version of the model in Gali & Monacelli (2005), which extends for a small open economy the new Keynesain DSGE model used as tool for monetary policy analysis in closed economies. A distinctive feature of the model is that the terms of trade enters directly into the new...

A flexible approach to direct inflation targeting is a viable monetary policy choice for transition economies that is believed to facilitate both the economic transition and the monetary convergence to the euro. Following this assumption, an analytical model investigating the link between the...