This paper develops a simple New Keynesian Dynamic Stochastic General Equilibrium (DSGE) model with rule-of-thumb consumers and external habits. Our theoretical model has a closed-form solution which allows the analytical derivation of its dynamical and stability properties. These properties are...

In this paper, we analyze coordination of macroeconomic stabilization policies within the EMU by focusing, in a dynamic set-up, on asymmetries, externalities, and the existence of a multi-country context. We study how coalitions among fiscal and monetary authorities are formed and what are their...

Introduction -- Theories -- Optimal growth theory revisited -- Continuous-time modelling -- Demand factors and GDP growth -- Lamp & banks balance sheet constraints -- Secular stagnation -- Policies -- Public finance and inflation -- Government budget constraints -- Productivity as an...