In a wide class of monetary models with both cash and credit goods, the main welfare cost of inflation is that it distorts the choice between these two goods. In these models, distortions exist because the relevant measure of the relative price between cash and credit goods for consumers is the usual relative price discounted by the nominal interest rate. Changes in the inflation rate therefore...

This paper examines how nominal uncertainty affects the choice firms face to serve a foreign market through exports or to produce abroad as a multinational. I develop a two-country, stochastic general equilibrium model in which firms make production and pricing decisions in advance, and I consider its implications for the relative attractiveness of exporting and multinational production. I find...

I develop and estimate a monetary business cycle model with nominal loans and collateral constraints tied to housing values. Demand shocks move housing and nominal prices in the same direction, and are amplified and propagated over time. The financial accelerator is not uniform: nominal debt dampens supply shocks, stabilizing the economy under interest rate control. Structural estimation suppor...

This paper studies the interaction between monetary and macro-prudential policies in a simple model with both nominal and financial frictions. The nominal friction gives rise to a conventional monetary policy objective emphasized in the New Keynesian literature. The financial friction, in the form of an occasionally binding collateral constraint, gives rise to a financial stability objective. ...

A robust Capon beamformer (RCB) against the uncertainty of nominal array steering vector (ASV) is formulated in this paper. The RCB, which can be categorized as diagonal loading approach, is obtained by maximizing the output power of the standard Capon beamformer (SCB) subject to an uncertainty constraint on the nominal ASV. The bound of its output signal-to-interference-plusnoise ratio (SINR) ...

This paper investigates the effect of exchange rate uncertainty on the Iran’s import trade. The exchange rate ‎uncertainty series were generated utilizing the TARCH model. This model analyzes the asymmetric effects. The analysis of uncertainty and asymmetry ‎of the exchange rate shows significant TARCH ‎effect on Iran’s exchange rates‎. The findings of the study indicate negative shocks (bad ne...

In many economies, the monetary policy instrument is the level of short-term nominal interest rates, but the monetary policy stance might be better characterised by the ex ante real interest rate that this nominal rate implies, relative to some “neutral” or “natural” real rate of interest. In this paper, we estimate the natural rate of interest and the real interest rate gap the difference betw...