Using state-of-the-art methods, this study estimates and compares the effects of exogenous shocks to global oil production on seven major industrialized economies. The main findings are: (1) There is a fair degree of similarity in the real growth responses. An exogenous oil supply disruption...

We compute the optimal non-linear interest rate policy under commitment for a forward-looking stochastic model with monopolistic competition and sticky prices when nominal interest rates are bounded below by zero. When the lower bound binds, the optimal policy is to reduce the real rate by...

We analyse deflationary bubbles in a model where money is the only financial asset. We show that such bubbles are consistent with the household’s transversality condition if and only if the nominal money stock is falling. Our results are in sharp contrast to those in several prominent...

In this study, we perform a quantitative assessment of the role of money as an indicator variable for monetary policy in the euro area. We document the magnitude of revisions to euro area-wide data on output, prices and money, and find that monetary aggregates have a potentially significant role...

This paper explores the interrelation between the degree of unemployment persistence and the unemployment-productivity trade-off. The analysis suggests that the more effective are structural labour market policies (designed to change labour market institutions and laws, such as job security...

Pricing complementarities play a key role in determining the propagation of monetary disturbances in sticky price models. We propose a procedure to infer the degree of firm-level pricing complementarities in the context of a menu cost model of price adjustment using data on prices and market...

Este documento utiliza la metodología de Melo et al. (2003) para la actualización de la descomposición del Break Even Inflation (BEI) presentado en Melo y Granados (2010) cuando se dispone de nuevas observaciones. El procedimiento de actualización utiliza una transformación del modelo de...

Este documento utiliza la metodología de Melo et al. (2003) para la actualización de la descomposición del Break Even Inflation (BEI) presentado en Melo y Granados (2010) cuando se dispone de nuevas observaciones. El procedimiento de actualización utiliza una transformación del modelo de...

ToTEM – the Bank of Canada’s principal projection and policy-analysis model for the Canadian economy – is extended to include inventories. In the model, firms accumulate inventories of finished goods for their role in facilitating the demand for goods. The model is successful in matching...

In this paper we investigate purchasing power parity in the CEE and post-war former Yugoslav countries during the EU integration process in 1994–2006. This work stems from longer-term tests of real exchange rate convergence in the former Yugoslavia. This period is of interest on two fronts:...