Macroeconomic Dynamics Vol

TRIM SIZE 6x9" Macroeconomic Dynamics Vol. VOLUME 22, NUMBER 1 , JANUARY 2018 MACROECONOMIC DYNAMICS Volume 22 , Number 1 , January 2018 Contents

Special Issue on Current Macroeconomic Challenges Edited by Giovanni Di Bartolomeo and Enrico Saltari ARTICLES Current Macroeconomic Challenges Giovanni Di Bartolomeo and Enrico Saltari 1 Overleveraging, Financial Fragility, and the Banking–Macro Link: Theory and Empirical Evidence 22 4 , No. MACROECONOMIC Stefan Mittnik and Willi Semmler Unraveling the Skill Premium 1 Peter McAdam and Alpo Willman 33 , January DYNAMICS Monetary Policy, Factor Substitution, and Convergence Rainer Klump and Anne Jurkat 63

Why is Optimal Growth Theory Mute? Restoring Its Rightful Voice Olivier de La Grandville 77 2018

Elasticity of Substitution and Technical Progress: Is There a Misspecification Pages Problem? Daniela Federici and Enrico Saltari 101 Stabilization and Commitment: Forward Guidance in Economies with Rational Expectations

Andrew Hughes Hallett and Nicola Acocella 122 1 – 172 Optimal Inflation Targeting Rule under Positive Hazard Functions for Price Changes Giovanni Di Bartolomeo and Marco Di Pietro 135 Firms’ Endogenous Entry and Monopolistic Banking in a DSGE Model Carla La Croce and Lorenza Rossi 153

EDITOR: WILLIAM A. BARNETT

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Volume 22, Number 1, January 2018

Special Issue on Current Macroeconomic Challenges

Edited by Giovanni Di Bartolomeo and Enrico Saltari

Volume 22, Number 1, January 2018 Contents

Special Issue on Current Macroeconomic Challenges Edited by Giovanni Di Bartolomeo and Enrico Saltari

ARTICLES Current Macroeconomic Challenges Giovanni Di Bartolomeo and Enrico Saltari 1 Overleveraging, Financial Fragility, and the Banking–Macro Link: Theory and Empirical Evidence Stefan Mittnik and Willi Semmler 4 Unraveling the Skill Premium Peter McAdam and Alpo Willman 33 Monetary Policy, Factor Substitution, and Convergence Rainer Klump and Anne Jurkat 63 Why is Optimal Growth Theory Mute? Restoring Its Rightful Voice Olivier de La Grandville 77 Elasticity of Substitution and Technical Progress: Is There a Misspeciﬁcation Problem? Daniela Federici and Enrico Saltari 101 Stabilization and Commitment: Forward Guidance in Economies with Rational Expectations Andrew Hughes Hallett and Nicola Acocella 122 Optimal Inﬂation Targeting Rule under Positive Hazard Functions for Price Changes Giovanni Di Bartolomeo and Marco Di Pietro 135 Firms’ Endogenous Entry and Monopolistic Banking in a DSGE Model Carla La Croce and Lorenza Rossi 153

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