In this paper we construct a rational expectations model based on a Phillips curve that embodies persistence in inflation. As we assume that the central bank targets the natural rate of output, there is no inflation bias. We derive optimal monetary policy rules that are state-contingent and...

This paper presents estimates of a price-pressure indicator for Korea. It does this by constructing measures of how much M2 velocity and output differ from their long-term values. This, in turn, involves estimating a demand for money function in an error correction framework in which interest...

This chapter is the collection of eight papers on different aspects of the first 10 years of economic transition. Transition issues have appeared initially quite controversial. There have been controversies on the speed of reforms, privatization methods, the role and organization of government,...

In this paper we extend the BEER (Behavioral Equilibrium Exchange Rate) approach which identifies an estimated equilibrium relationship between the real exchange rate and economic fundamentals. Here the economic fundamentals are decomposed using Johansen cointegration methods into transitory and...