This paper estimates the importance of the cost channel of monetary policy in a New
Keynesian model of the business cycle. A model with nominal and real rigidities is extended …

Uncertainty is a ubiquitous concern emphasized by policymakers. We study how uncertainty
affects decision-making by the Federal Open Market Committee (FOMC). We distinguish …

High interest rate currencies tend to appreciate in the future relative to low interest rate
currencies instead of depreciating as uncovered interest parity (UIP) predicts. I construct a …

This paper compares the properties of interest-rate rules such as simple Taylor rules and
rules that respond to price-level fluctuations (called Wicksellian rules) in a basic forward …

We defend the forecasting performance of the Federal Reserve Open Market Committee
(FOMC) against the criticism of Christina and David Romer (2008, American Economic …

This paper uses a dynamic stochastic general equilibrium (DSGE) model with sticky
information as a laboratory to study monetary policy. It characterizes the model's predictions …

The choice between targeting headline and core inflation is crucial in times of large supply
shocks. We investigate this issue in a multi-sector dynamic stochastic general equilibrium …

The cost channel of monetary transmission describes a supply‐side effect of interest rates
on firms' costs. Previous research has found this effect to vary, both over time and across …

This paper characterizes the properties of various interest-rate rules in a basic forward-
looking model. We compare simple Taylor rules and rules that respond to price-level …

The recent financial crisis of 2007–2009 raises several issues related to the conduct of
monetary policy during the last two decades. Inflation targeting monetary strategy has been …