We examine robustness of stability under learning to observability of exogenous shocks. Regardless of observability assumptions, the minimal state variable solution is robustly stable under learning provided the expectational feedback is not both positive and large, while the nonfundamental solution is never robustly stable. Overlapping generations and New Keynesian models are considered and co...

The papers in this symposium address the issue of multiple equilibria that can be induced by monetary policy in models with capital accumulation. In particular they examine how the “Taylor Principle”, under which interest rates respond more than proportionately to increases in inflation, can generate multiple equilibria. They also explore the design of policies to avoid the problem of multiple ...

We show that for generic economies, every equilibrium admits Pareto improving monetary policy, even with multiple commodities per state. The main assumption is that asset incompleteness be intermediate, in that household heterogeneity does not exceed the number of assets present and absent. We argue this as a special case of the general framework in Turner (2003b) for proving the generic existe...

1. Peidro R, Froelicher V, Stein R. Triagem pré-participação do atleta jovem: é essa a hora para um consenso? Arq Bras Cardiol. 2011;96(3):e50-e52. 2. Matos LDNJ, Pastore CA, Samesima N, Franco FGM. Alterações do eletrocardiograma de repouso com o treinamento físico. In: Negrão CE, Barretto ACP, ed. Cardiologia do exercício: do atleta ao cardiopata. 3aed. São Paulo: Editora Manole; 2010. p. 177...

This paper develops a model with endogenously coarse rules. A principal hires an agent to take an action. The principal knows the optimal state-contingent action, but cannot communicate it perfectly due to communication constraints. The principal can use previously realized states as examples to define rules of varying breadth. We analyze how rules are chosen under several assumptions about how...

JEL classification E52 This paper examines the credibility of the Federal Reserve's monetary targets using survey data on money growth forecasts to measure market expectations. The paper provides two main results. First, there is strong evidence that the monetary targets were credible over the 1978 to 1993 sample period, although credibility fell in the post-1985 period. Second, both the federa...

This paper derives the optimal size and timing of interest rate target changes. Despite the simplicity of the optimal rule, we are able to replicate a number of puzzling features of interest rate targeting observed in practice, as well as explain some dynamic properties of market interest rates. Extensions to deal with monetary policy cycles, anticipated and unanticipated target changes, and th...

This paper examines the relation between money and housing variables in the euro area and in the US. Our empirical model is based on a standard money demand relation which is augmented by housing market variables. In doing so, co-integrated money demand relationships can be established for both the euro area and the US. Furthermore, we find evidence for asset inflation channels, that is, liquid...

I develop an asset-pricing model in which financial assets are valued for their liquidity– the extent to which they are useful in facilitating exchange–as well as for being claims to streams of consumption goods. The implications for average asset returns, the equitypremium puzzle, and the risk-free rate puzzle, are explored both analytically and quantitatively in a version of the model that ne...

In an example, monetary policy can determine the information revealed by prices, and thus it can be effective. Monetary policy that varies only with public information can guarantee the full revelation of information at equilibrium, which is optimal. Full indexation need not attain full revelation and, as a consequence, need not implement an optimal allocation. Journal of Economic Literature Cl...