This paper analyzes the effectiveness of a tax on inflation policy (TIP)—a fiscal instrument that would require firms to pay a tax proportional to the increase in their prices—as a complement to …
This paper builds a theory of macroprudential policy whose only friction is nominal rigidity in goods and labor markets, possibly combined with a constraint on monetary policy such as the zero lower …
This 2005 *Journal of Political Economy* paper by Ricardo Lagos and Randall Wright builds a monetary search model in which each period alternates between a decentralized market with anonymous …
Adding habit formation in consumption to an optimising sticky-price model changes both the IS curve and the Phillips curve, makes the variance of output itself -- not only the output gap -- …
A New Keynesian model is extended with hiring costs that rise in labour market tightness and with real wage rigidity, so that unemployment exists and moves. Under the paper's utility specification the …
This 2003 Review of Economic Studies paper by Michael Devereux and Charles Engel builds a welfare-based, two-country stochastic sticky-price model -- extending Obstfeld and Rogoff (1995, 1998) -- to …
PublishedJournal of Monetary EconomicsOnline 1 Jun 2026Published Jun 2026
This paper employs a proxy structural VAR model to examine the effects of global supply chain (GSC) shocks on U.S. macroeconomic variables and the Federal Reserve's historical response, and evaluates …
This paper asks how much of the HANK literature's message about aggregate behaviour survives in a far simpler model, and answers by first identifying exactly what heterogeneity does.
PublishedClassicJournal of International EconomicsPublished Feb 2000
This 2000 Journal of International Economics paper by Maurice Obstfeld and Kenneth Rogoff extends the "Redux" sticky-price approach to a genuinely stochastic setting with an exact closed-form solution …
In an optimizing-agent model where both wages and prices are set in staggered Calvo contracts, monetary policy cannot reach the allocation that would prevail under fully flexible wages and prices, …
Online FirstJournal of Money, Credit and BankingOnline 7 May 2026
This paper estimates the European Central Bank's loss function directly rather than inferring it from a reaction function, using the tone of the Governing Council's press conference introductory …
PublishedClassicJournal of Money, Credit and BankingPublished Jan 2007
The standard New Keynesian model implies that stabilising inflation also stabilises the welfare-relevant output gap -- a property the authors name the "divine coincidence" and trace to the absence of …
Letting a fraction of consumers and price setters replace optimisation with a backward-looking rule of thumb adds endogenous persistence to output and inflation, changes how shocks travel through a …