This paper investigates the interaction between uncertainty and monetary policy by estimating a non-linear VAR with US post-WWII data. The indicator is treated both as an endogenous variable in transition discriminating high vs. low states. impact of shocks different phases cycle assessed via computation Generalized Impulse Response Functions. Monetary are found to be less effective when high, ...

the main purpose of this paper is theoretically to design the optimal intervention in the foreign exchange market in iran, which has not been investigated by previous studies. the economic fundamentals are strongly affected by the optimal foreign exchange intervention, the consistency of foreign exchange intervention with other policies and political authorities' beliefs about the interven...

Seven years after the outset of Great recession, debate continues as to which economic policies are necessary return a state balanced and sustainable growth. In this context, many voices demand more active participation central banks, including forceful implementation monetary policy measures. The Austrian school thought maintains that financial systems play key role, but it does so from founda...

We compare macroeconomic models of sticky-prices (Calvo and Costsof-adjustment) with flexible price models in terms of optimal seigniorage. This sheds light on the importance of relative price distortions. Sticky-price models with no price dispersion terms have unattractive implications, we argue, when it comes to the derivation of optimal policies. We provide examples where they may imply very...

This paper explores the similarity and differences between the credibility problem of monetary policy and the under-investment problem of price regulation. In both cases reputational solutions are possible provided that the policymaker is sufficiently far-sighted. But even if regulators are far-sighted, this solution to the investment problem is undermined if capital depreciates slowly. Flexibl...

I present a tractable dynamic model of political economy where disagreements about the composition of public spending result in implementation of short-sighted policies. The relative price of investment to consumption is excessively large in equilibrium due to over-taxation. Investment rates are too low which slows down growth along the transition. In the long run, this results in output, consu...

In this paper, we analyze coordination of macroeconomic stabilization policies within the EMU by focusing, in a dynamic set-up, on asymmetries, externalities, and the existence of a multi-country context. We study how coalitions among fiscal and monetary authorities are formed and what are their effects on the stabilization of output and price. In particular, our attention is directed to study ...

We analyze how public debt evolves when successive policymakers have different policy goals and cannot make credible commitments about their future policies. We consider several cases to be able to quantify the effects of imperfect commitment, political disagreement and political turnover. Imperfect commitment drives the long-run level of debt to zero. With political disagreement debt is a size...

This paper analyzes the pros and cons of both the integrated and the specialized approaches to financial supervision. The theoretical arguments are discussed considering some recent experiences around the world and having the Latin American and the Caribbean context as a frame. Based on the analysis of the efficacy and the efficiency of each approach to fulfill the main objectives of financial ...

In a two person game, the Liar strategy falsifies or subverts the predictable outcomes of the other person’s strategy. Following the Gödelian argument of Binmore(1987), we prove that the best response to the Liar strategy in the Nash equilibrium of the game are surprise strategies. Computable game theory permits the surprise/innovation to be modelled by a total computable best response function...