A huge body of empirical and theoretical literature has emerged on the relationship between foreign exchange (FX) uncertainty and international trade. Empirical findings about the impact of FX uncertainty on trade figures are at best weak and often...

I examine the standard New Keynesian model augmented with product entry and exit. The statistical agency in the model measures product entry with a delay. Consequently, measured inflation departs from true, utility-based inflation. I show that the...

This paper investigates if the euro's effect on euro-area trade differs across trade sectors and across country pairs, and to what degree heterogeneity matters for estimating the aggregate euro effect. Time-varying latent variables, which are...

Empirical data indicate that firms tend to have below-average productivity upon entry and that they tend to experience post-entry productivity growth. I present a New Keynesian model with growth in firm-specific productivity and firm turnover that...

The natural interest rate is of great relevance to central banks, but it is difficult to measure. We show that in a standard microfounded monetary model, the natural interest rate comoves with a transformation of the money demand that can be computed...

The paper examines a New Keynesian model with product entry and exit and with two types of households. Households consume different product baskets and, therefore, face different inflation rates. The statistical bureau used in the model measures...

Empirical data show that firms tend to improve their ranking in the productivity distribution over time. A sticky-price model with firm-level productivity growth fits this data and predicts that the optimal long-run inflation rate is positive and...

Kiel Policy Brief Nr. 54: Die Finanzkrise und die vielfältigen Politikinterventionen zur Lösung der Krise könnten zu längerfristigen Inflationsunterschieden in der Eurozone führen.

This paper examines the role of cross-sectional heterogeneity for estimating the euro's effect on euro-area trade. In the empirical analysis, the impact of trade costs on trade and the transition dynamics to the new monetary regime can vary...