We develop optimal finite‐sample approximations for the band pass filter. These
approximations include one‐sided filters that can be used in real time. Optimal …

The new edition of a comprehensive treatment of monetary economics, including the first
extensive coverage of the effective lower bound on nominal interest rates. This textbook …

The substantially revised fourth edition of a widely used text, offering both an introduction to
recursive methods and advanced material, mixing tools and sample applications. Recursive …

We provide new evidence that models of the monetary transmission mechanism should be
consistent with at least the following facts. After a contractionary monetary policy shock, the …

How much discretion should the monetary authority have in setting its policy? This question
is analyzed in an economy with an agreed‐upon social welfare function that depends on the …

We develop a dynamic model with optimizing private agents and a benevolent, optimizing
monetary authority that cannot commit to future policies. We characterize the set of …

Monetary policy analyses usually assume an atomistic private sector, thereby ignoring
potential interactions between policy and wage-setting decisions. Yet, non-atomistic wage …

This paper develops recursive methods to study optimal and time consistent policy in
dynamic models. We analyze a version of Calvo's 1978 monetary model and show that its …

This paper analyzes the strategic interaction between the monetary policymakers of two
countries, in an intertemporal general equilibrium model with nominal rigidities and …

This paper develops a two‐country general equilibrium model to analyze the optimal rate of
inflation under discretion. When agents' welfare is the sole policy objective it is possible to …