This paper reviews recent research on the political economy of monetary policy-making,
both by economists and political scientists. The traditional argument for central bank …

The euro area recently experienced a prolonged period of weak economic activity and very
low inflation. This paper reviews models of business cycle stabilization with an eye to …

Where do inflation and deflation ultimately come from? The fiscal theory of the price level
offers a simple answer: Prices adjust so that the real value of government debt equals the …

We develop the theory of price-level determination in a range of models using both ad hoc
policy rules and jointly optimal monetary and fiscal policies and discuss empirical issues that …

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This article presents a model of quantitative easing (QE) at the zero lower bound (ZLB) on
the short-term nominal interest rate. QE, which reduces the maturity of government debt, is …

In this chapter, we discuss a number of challenges for structural macroeconomic models in
the light of the Great Recession and its aftermath. It shows that a benchmark DSGE model …

This paper analyses the factors that govern the choice of the currency composition of official
foreign exchange reserves. First, we introduce a new panel dataset on the key currencies in …

In this chapter, we argue that the Federal Reserve should use its balance sheet to help
reduce a key threat to financial stability: the tendency for private-sector financial …

Several recent monetary policy issues and puzzles can be understood more clearly if the
traditional exclusion of the government budget constraint from macroeconomic models is …