## Miscellaneous Academic Writings

Below find links to—and also brief descriptions of—some academic manuscripts, which do not quite fit naturally into other categories.

Interest rate version of the model of Section 2 of "Equilibrium Contracts for the Central Bank of a Monetary Union", w. Avinash Dixit (mimeo, December 2000)

This note provides a variant of the simple model used in Section 2 of "Equilibrium Contracts for the Central Bank of a Monetary Union" (the paper was eventually published in 2003 as "Common Agency with Rational Expectations: Theory and Application to a Monetary Union" in *The Economic Journal*). Instead of treating inflation as the policy instrument (as in that paper), we consider the nominal interest rate as the instrument. It turns out that one can express all relevant economic quantities in therms of the actual and expected nominal interest rate.

Optimal Degrees of Transparency in Monetary Policymaking: The case of imperfect information about the cost-push shock (mimeo, November 2000) ( 125 Kb).

This note complements my results in Jensen (2002, *Scandinavian Journal of Economics*) wherein transparency is synonymous with release of information about shocks hitting after policy is set (i.e., "control errors''). Here, I examine the case where transparency is synomymous with release of information about shocks realized before policy is set. It is shown that the distortions induced by transparency in terms of stabilization performance also apply in this case.

Inflation aversion and equilibrium activity in Jensen (1993) (mimeo, December 2000) ( 90 Kb).

In 1993, I published a paper in *Open Economies Review* (vol. 4, 269-285), which considered the implications of monetary policy cooperation, when wage setters are non-atomistic. It turned out that policy regime shifts alter the strategic interaction among unions, such that the shifts have real effects (in particular, monetary policy cooperation leads to lower equilibrium employment). In this note, I examine how the policymakers' attitude towards inflation (i.e., their degree of "conservatism") affects equilibrium employment in the model. It is simple to show that more inflation attention leads to higher employment and lower inflation.

Explaining an Inflation Bias without Using the Word "Surprise" (mimeo, April 2000. This version: 2003) ( 100 Kb).

Recently, the well-known theory of monetary credibility problems, the Barro-Gordon model, has been labelled irrelevant. Having applied the basics of this model in much of my research, I couldn't help write this note where I restate the model in order to remove an aspect that apparently is offensive to some reseachers. This is the "surprise inflation" aspect of the original model. I show that through a minor twist of the model, the model's main insights can quite easily be explained without using such terminology. I therefore argue that the theory deserves its reputation as one describing monetary credibility problems, and one identifying how to overcome these.

Tax Distortions, Unemployment and International Policy Cooperation (mimeo, December 1991) ( 65 Kb).

This paper from my Ph.D.-thesis never really "made it." I, however, still personally like some of the results. Moreover, from a methodological point of wiev, one may note that it is one of the first papers to consider the interplay between international monetary and fiscal cooperation within a two-country version of the Alesina and Tabellini (1987, *Economic Inquiry*) model. The value of this, is, of course, a matter of subjective judgement, but at least quite a few papers subsequently emerged in this spirit.