#2009-039A "Incidence of an Outsourcing Tax on Intermediate Inputs"
by Subhayu Bandyopadhyay
August 2009

The paper uses a Hecksher-Ohlin-Samuelson type general equilibrium framework to consider the incidence of an outsourcing tax on an economy in which the production of a specific intermediate input has been fragmented and outsourced. More...

#2009-038A "How Did We Get to Inflation Targeting and Where Do We Go Now? A Perspective From the U.S. Experience"
by Daniel L. Thornton
August 2009

This paper advances the hypothesis that the transition from there-is-little-central-banks-can-do-to-control-inflation to inflation targeting occurred because central banks, especially the Federal Reserve, demonstrated that central banks can control inflation rather than a consequence of marked improvement in the professions understanding of how monetary policy controls inflation. More...

FORTHCOMING: Inflation Targeting Twenty Years On: Past Lessons and Future Prospects. David Cobham, Øyvind Eitrheim, Stefan Gerlach and Jan Qvigstad, (ed.) Cambridge University Press

#2009-037A "The Identification of the Response of Interest Rates to Monetary Policy Actions Using Market-Based Measures of Monetary Policy Shocks"
by Daniel L. Thornton
August 2009

It is common practice to estimate the response of asset prices to monetary policy actions using market-based measures of monetary policy shocks, such as the federal funds futures rate. More...

#2009-036A "Problems in the Numerical Simulation of Models with Heterogeneous Agents and Economic Distortions"
by Adrian Peralta-Alva, and Manuel S. Santos
August 2009

Our work has been concerned with the numerical simulation of dynamic economies with heterogeneous agents and economic distortions. More...

FORTHCOMING: Journal of The European Economic Association (JEEA)

#2009-035A "Dynamic Taxation, Private Information and Money"
by Christopher J. Waller
August 2009

The objective of this paper is to study optimal fiscal and monetary policy in a dynamic Mirrlees model where the frictions giving rise to money as a medium of exchange are explicitly modeled. More...

#2009-034A "Random Matching and Money in the Neoclassical Growth Model: Some Analytical Results"
by Christopher J. Waller
August 2009

I use the monetary version of the neoclassical growth model developed by Aruoba, Waller and Wright (2008) to study the properties of the model when there is exogenous growth. More...

FORTHCOMING: Macroeconomic Dynamics

#2009-033B "Price Level Targeting and Stabilization Policy"
by Aleksander Berentsen, and Christopher J. Waller
August 2009
Revised October 2009

We construct a dynamic stochastic general equilibrium model to study optimal monetary stabilization policy. More...

#2009-032B "Optimal Stabilization Policy with Endogenous Firm Entry"
by Aleksander Berentsen, and Christopher J. Waller
August 2009

Monetary policy has significant but overlooked effects on entry and exit of firms. We study optimal monetary stabilization policy in a DSGE model with microfounded money demand and endogenous firm entry. More...

#2009-031A "Money and Capital: A Quantitative Analysis"
by S. Borağan Aruoba, Christopher J. Waller, and Randall Wright
August 2009

We study the effects of money (anticipated inflation) on capital formation. Previous papers on this adopt reduced-form approaches, putting money in the utility function or imposing cash in advance, but use otherwise frictionless models. More...

#2009-030A "Does Money Matter in Inflation Forecasting?"
by Jane M. Binner, Peter Tino, Jonathan Tepper, Richard G. Anderson, Barry Jones, and Graham Kendall
June 2009

This paper provides the most fully comprehensive evidence to date on whether or not monetary aggregates are valuable for forecasting US inflation in the early to mid 2000s. More...