This paper examines downward price rigidity in Iranian house market and discusses whether this characteristic would result in an asymmetric relationship between house price and monetary policy. To test the downward house price rigidity the threshold GARCH model is employed. The asymmetric adjustment to monetary policy is examined using the asymmetric cointegration and error correction models. T...

This paper examines how alternative views of the monetary transmission mechanism affect the choice of a monetary policy rule. The main finding is that many different structural models indicate that the same simple monetary policy rule—one in which the central bank’s target short-term interest rate reacts to inflation and to real output—would perform well. Such rules work well even in models whe...

There is controversy about whether a monetary union is feasible in the East Asian region. Amongst the criteria for establishing a monetary union, most of the existing studies focus on the symmetric issue of fundamental shocks and the extent of correlations by applying the Blanchard and Quah (1989) structural vector autoregression (VAR) technique, which includes the firstdifferenced variables in...

We study the transmission of monetary policy in credit economies where money serves as a medium of exchange. We find that—in contrast to current conventional wisdom in policy-oriented research in monetary economics—the role of money in transactions can be a powerful conduit to asset prices and ultimately, aggregate consumption, investment, output, and welfare. Theoretically, we show that the ca...

We explore the use of external instrument SVAR to identify monetary policy shocks. We identify a forward guidance shock as the monetary shock component having zero instant impact on the policy rate. A contractionary forward guidance shock raises both future output and price level, stressing the relative importance of revealing policymakers’ view on future output and price level over committing ...

Why do monetary unions fail? Answers to this question from a material-based approach tend to point to a breakdown in elite political support, especially when actors have material incentives to ‘cheat’ on their multilateral commitments rather than cooperate to overcome the collective action problem that a monetary union entails. Recent ideational approaches have focused on the role of shared eco...

Using a nonlinear structural VAR approach, we estimate the effects of exogenous monetary impulses in the presence of a zero lower bound constraint on nominal interest rates and examine the impact of such a constraint on the effectiveness of counter-cyclical monetary policies. We find that a binding zero bound on nominal interest rates can eliminate more than 50% of the effect of an exogenous mo...

Microscopic simulation tool kits allow for consideration of the two processes of railway operations and the previous timetable production. Block occupation conflicts on both process levels are often solved by using defined train priorities. These conflict resolutions (dispatching decisions) generate reactionary delays to the involved trains. The sum of reactionary delays is commonly used to eva...

We use a Bayesian Markov Chain Monte Carlo algorithm jointly to estimate the parameters of a ‘true’ data generating mechanism and those of a sequence of approximating models that a monetary authority uses to guide its decisions. Gaps between a true expectational Phillips curve and the monetary authority’s approximating non-expectational Phillips curve models unleash inflation that a monetary au...

We examine the impact of different degrees of fiscal feedback on debt in an economy with nominal rigidities where monetary policy is optimal. We look at the extent to which different degrees of fiscal feedback enhances or detracts from the ability of the monetary authorities to stabilise output and inflation. Using an objective function derived from utility, we find the optimal level of fiscal ...