In Eastern Europe privatization is now a mass phenomenon. The authors propose a model of it by means of an illustration from the example of Poland, which envisages the free provision of shares in formerly public undertakings to employees and consumers, and the provision of corporate finance from...

We open a New Keynesian Phillips curve model to nonrecurring structural shifts in its parameters and propose a novel implementation of Muth’s hypothesis to represent market participants’ inflation expectations under Knightian uncertainty arising from such shifts. We refer to our approach as...