This paper addresses a new problem to design a two-echelon supply chain network over a multi-period horizon. Strategic decisions are subject to a given budget and concern the location of new facilities in the upper and intermediate echelons of the network as well as the installation of storage...

We consider a multi-period facility location problem that takes into account changing trends in customer demands and costs. To this end, new facilities can be established at pre-specified potential locations and initially existing facilities can be closed over a planning horizon. Furthermore,...

In a model with costly financial intermediation and financial disturbances, credit subsidies are desirable, irrespective of how they are financed. They are especially useful when the zero lower bound constraint is reached. They are superior to other credit policies such as direct lending.

We address an extension of the classical multi-period facility location problem in which customers are sensitive to delivery lead times. Accordingly, two customer segments are considered. The first segment comprises customers that require timely demand satisfaction, whereas customers accepting...

A target for the short-term nominal interest rate does not pin down realized inflation. Neither does it pin down the term premia. Short and long rates are threrefore independent monetary policy instruments. A target of the term structure is equivalent to a peg of the returns on state-contingent...

Under a monetary policy rule for the nominal interest rate, i.e. the return on risk-free short-term nominal bonds, there may be a unique local equilibrium, but there are in general multiple global equilibria. We show that the appropriate interest rate instruments under uncertainty are...

Nominal interest rates typically approach the zero-lower bound during a financial crisis. This is a constraint on optimal monetary policy: In a model with financial frictions, policy would set negative nominal interest rates in response to increases in credit spreads. We find that fiscal policy...

This paper assesses the relevance of the exchange rate regime for stabilization policy. Using both fiscal and monetary policy, we conclude that the exchange rate regime is irrelevant. This is the case independently of the severity of price rigidities, independently of asymmetries across...