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Third Quarter 2015

In This Edition

  • A Model of U.S. Monetary Policy Before and After the Great Recession

    The author studies a simple dynamic general equilibrium monetary model to interpret key macroeconomic developments in the U.S. economy both before and after the Great Recession.

  • Fear of Liftoff: Uncertainty, Rules, and Discretion in Monetary Policy Normalization

    As the author describes it, the Federal Reserve's muddled mandate to attain simultaneously the incompatible goals of maximum employment and price stability invites short-term-oriented discretionary policymaking inconsistent with the systematic approach needed for monetary policy to contribute best to the economy over time. Fear of liftoff serves as an example.

  • Human Capital and Development

    Perhaps no question has attracted as much attention in the economics literature as "Why are some countries richer than others?" In this article, the author revisits the "development problem" and provides some estimates of the importance of human capital in accounting for cross-country differences in output per worker.

  • Monetary Policy in Small Open Economies: The Role of Exchange Rate Rules

    Understanding the costs and benefits of alternative monetary policy rules is important for economic welfare. Within the context of a small open economy model and building on the work of Mihov and Santacreu (2013), the author analyzes the economic implications of two monetary policy rules.

  • Quantitative Macro Versus Sufficient Statistic Approach: A Laffer Curve Dilemma?

    This article highlights two approaches to tax policy for the top 1 percent of earners: dynamic general equilibrium models requiring complicated calibration and simulation algorithms and strong structural assumptions vs. the sufficient statistic approach, which attempts to parsimoniously reach the trinity of empirical, theoretical, and policy relevance.