The latest world economic and financial crisis highlighted problems in macroeconomic policies pursued by developed economies as well as the necessity of searching for an effective regulatory framework. In particular, doubts have occurred in the indisputability of advantages of inflation...

This paper discusses the key characteristics of the U.S. financial crisis 2007-2009 and focuses on the Federal Policy Response to the lack of liquidity in the financial sector known as the “Credit Crunch”. The surprising depth of the crisis required unprecedented policy measures to be used...

This paper discusses the key characteristics of the U.S. financial crisis 2007-2009 and focuses on the Federal Policy Response to the lack of liquidity in the financial sector known as the “Credit Crunch”. The surprising depth of the crisis required unprecedented policy measures to be used...

We show that the defining features of the Great Moderation were a shift from output volatility to medium-term fluctuations and a shift in the origin of those fluctuations from the real to the financial sector. We discover a Granger-causal relationship by which financial cycles attenuate...

We consider a general equilibrium model where monetary policy has redistributive effects. Agents have stochastic preferences and face random buying and selling opportunities. We show that the Friedman rule is just the second best policy. However, the Friedman rule is Pareto optimal. It requires...

This theoretical contribution shows a simple way in which the quantity equation can be derived as a long-term equilibrium solution for the case of a closed economy and an open economy, respectively. It is shown first for the case of a closed economy which parameters stand behind "velocity" and...

This policy brief reports on the nominal GDP (NGDP) gap, a measure of the stance of US monetary policy, is the percent difference between the actual level and the neutral level of NGDP. The neutral level of NGDP is the dollar size of the economy when monetary policy has been neither expansionary...

This policy brief reports on the NGDP gap, a measure of unexpected changes in the dollar size of the US economy, is the percent difference between the actual and the neutral level of NGDP. The neutral level of NGDP, in turn, is a sum of all dollar incomes expected by households and businesses...