This paper reviews the distinction between the timeless perspective and discretionary
modes of monetary policymaking, the former representing rule-based policy as recently …

0.5yt yt where it denotes the Fed's operating target for the federal funds rate, t is the inflation
rate (measured by the GDP deflator), yt is the log of real GDP, and yt is the log of potential …

It is argued that inflation targeting is best understood as a commitment to a targeting rule
rather than an instrument rule, either a general targeting rule (explicit objectives for …

This article complements the structural New Keynesian macro framework with a no‐
arbitrage affine term structure model. Whereas our methodology is general, we focus on an …

This paper analyzes in detail the mechanisms behind fiscal stabilization policy and the role
of policy commitment in a micro-founded New-Keynesian model of a two-country monetary …

We would like to thank Jean Boivin, Rick Mishkin, Ed Nelson, and Lars Svensson for helpful
discussions, Brad Strum for research assistance, and the National Science Foundation for …

We investigate the performance of forecast-based monetary policy rules using five
macroeconomic models that reflect a wide range of views on aggregate dynamics. We …

This study analyzes a two-country dynamic general equilibrium model with nominal
rigidities, monopolistic competition and producer currency pricing. A quadratic …

This paper proposes a general method for deriving an optimal monetary policy rule in the
case of a dynamic linear rational-expectations model and a quadratic objective function for …

We investigate the implications of rule-of-thumb behaviour by consumers or price setters for
optimal monetary policy and simple interest rate rules. This behaviour leads to endogenous …