Research Newsletter Online 3/2011

​Resource mobility and aggregate fluctuations

The basic New Keynesian framework that is at the heart of most modern policy models building on dynamic stochastic general equilibrium analysis gives a central role to price and wage stickiness. At the same time, however, the framework incorporates fairly extreme assumptions about the ability of labour and capital to almost instantaneously move among alternative uses. To take a concrete example, in the baseline New Keynesian policy model the continuum of firms producing differentiated goods find it costly to change their selling prices, but these same firms can hire and fire workers at zero cost, and both workers and capital can instantly shift from one firm to another.  These baseline models face great difficulties in matching observed macroeconomic dynamics.
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Monetary policy under resource mobility

As part of its 200th anniversary celebrations the Bank of Finland hosted a high-level international conference on Monetary Policy Under Resource Mobility on May 5–6 in Helsinki. Almost two hundred people attended the conference, where the venue was populated by distinguished central bankers and academics from most corners of the world as well as other participants representing a variety of  institutions, both international and domestic.
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Workshop: China’s monetary and exchange rate policies

Bank of Finland’s Institute for Economies in Transition (BOFIT) held a high-level international workshop on 16–17 May on the subject of China’s monetary and exchange rate policies. Workshop participants represented both central banks and the academic world. The topic of interest was approached from numerous perspectives, as would be expected in light of the complexities involved.
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• Conferences and seminars
• Recent Bank of Finland research publications
• Forthcoming research