Abstract Interest-rate smoothing is traditionally attributed to the gradual adjustment of monetary policy to shocks. Rudebusch (2002) argues that smoothing can also arise spuriously if an autocorrelated variable is incorrectly excluded from the estimated reaction function. This paper presents a...

Traditional Taylor rules, which are estimated using a level specification linking the short-term interest rate to inflation and the output gap, are unstable when estimated on euro area data and forecast poorly out of sample. We present an alternative reaction function which takes the...

We estimate a structural model of the Irish housing and mortgage markets and isolate the role of demand and supply factors in each market. We focus on the pre-2004 period during which house prices and mortgage credit exhibited a stable relationship. We find that mortgage demand is determined by...

This research attempts to answer two particular questions: a) what factors drive SME credit constraints in the Irish economy and b) what is the impact of such constraints on the macro-economy, in particular on employment and investment. We find that constraints decrease with firm size while...

This paper considers the effect of systemic financial crises on aggregate consumption. Using a sample of 23 countries over 32 years, we find that consumption growth seems lower during banking crises, crises following credit booms and crises following house price booms. Moreover, the response to...

Since the onset of the financial crisis, consumption has fallen in many economies. This paper presents a small-scale DSGE model with occasionally binding credit constraints. Indebted households start facing credit constraints when the value of their main asset, which we assume to be housing,...

Since the onset of the financial crisis, income and consumption have fallen sharply in Ireland, particularly for young households. This paper shows that young households are more likely than older ones to be exposed to unemployment, arrears and negative equity. These may give rise to credit...

This paper analyses consumption in Ireland using household survey data. Studying surveys from 1994-95, 1999-2000 and 2004-05, we find that the median non-mortgage household tended to consume more than disposable income in the 1990s but apparently started spending in line with income by 2004-05....

This paper shows that the Japanese foreign exchange interventions in 2003/04 seem to have lowered long-term interest rates in a wide range of countries, including Japan. It seems that this decline was triggered by the investment of the intervention proceeds in US bonds and that a global...

We analyze the influence of the Taylor rule on US monetary policy by estimating the policy preferences of the Fed within a DSGE framework. The policy preferences are represented by a standard loss function, extended with a term that represents the degree of reluctance to letting the interest...