Under the European Monetary Union (EMU), member countries will be subject to common monetary policy shocks. Given the diversity in the economic and financial structures across the EMU economies, these common monetary shocks can be reasonably expected to have different effects. Little is known...

Currently there is a growing literature exploring the features of optimal monetary policy in New Keynesian models under both commitment and discretion. With respect to time consistent policy, the literature focuses on solving for allocations. Recently, however, King and Wolman (2004) have...

This paper examines the predictive power of shifts in monetary policy, as measured by changes in the real federal funds rate, for output, inflation, and survey expectations of these variables. The authors find that policy shifts have larger effects on actual output than on expected output; thus...