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The Science of Monetary Policy: a New Keynesian Perspective
This paper reviews the recent literature on monetary policy rules. We exploit the monetary policy design problem within a simple baseline theoretical framework. We then consider the implications ofExpand
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Agency Costs, Net Worth, and Business Fluctuations
This paper develops a simple neoclassical model of the business cycle in which the condition of borrowers' balance sheets is a source of output dynamics. The mechanism is that higher borrower netExpand
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Inflation Dynamics: A Structural Econometric Analysis
We develop and estimate a structural model of inflation that allows for a fraction of firms that use a backward looking rule to set prices. The model nests the purely forward looking New KeynesianExpand
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Monetary Policy Rules and Macroeconomic Stability: Evidence and Some Theory
We estimate a forward-looking monetary policy reaction function for the postwar US economy, pre- and post-October 1979. Our results point to substantial differences in the estimated rule acrossExpand
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Monetary Policy Rules in Practice: Some International Evidence
This paper reports estimates of monetary policy reaction functions for two sets of" countries: the G3 (Germany, Japan, and the U.S.) and the E3 (UK, France that since 1979 each of the G3 centralExpand
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Inside the Black Box: The Credit Channel of Monetary Policy Transmission
The 'credit channel' theory of monetary policy transmission holds that informational frictions in credit markets worsen during tight- money periods. The resulting increase in the external financeExpand
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Monetary Policy Surprises, Credit Costs and Economic Activity
We provide evidence on the nature of the monetary transmission mechanism. To identify policy shocks in a setting with both economic and financial variables, we combine traditional monetary vectorExpand
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Monetary Policy and Asset Price Volatility
We explore the implications of asset price volatility for the management of monetary policy. We show that it is desirable for central banks to focus on underlying inflationary pressures. Asset pricesExpand
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Systematic Monetary Policy and the Effects of Oil Price Shocks
Macroeconomic shocks such as wil price increases induce a systematic (endogenous) response of monetary policy. We develop a VAR-based technique for decomposing the total economic effects of a givenExpand
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European Inflation Dynamics
We provide evidence on the fit of the New Phillips Curve (NPQ for the Euro area over the period 1970-1998, and use it as a tool to compare the characteristics of European inflation dynamics withExpand
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