Recent research have provided evidence that backward-looking models fit the data well while purely forward-looking models seem to be inconsistent with data. Consequently, many recent papers in the monetary policy rule literature have used “hybrid” models, which contain both backwardand forward-looking components. In this paper, I demonstrate that a dynamic general equilibriummodel with flexible...

How will sovereign debt markets evolve in the 21st century? We survey how literature has responded to eurozone crisis, placing “lessons learned” historical perspective. The crisis featured: (i) return of problems advanced economies; (ii) a bank-sovereign “doom-loop” and propagation risk households firms; (iii) roll-over self-fulfilling dynamics; (iv) severe distress without outright defaults; (...