| This thesis consists of three essays on various monetary and financial topics and sheds new light on some questions that are still ambiguous or have not yet been explored in the literature.;In Chapter II, we focus on postwar US data and incorporate new financial measures and monetary policy shocks in a vector autoregression (VAR) system in order to test whether one or the other has any real effect on the economy. We find econometric evidence that these shocks and events are exogenous, and therefore the exogenous nature of shocks to monetary policy and stock market crashes investigated in this study may help policymakers, especially regarding debates related to eventual relationships between optimal monetary policy and financial stability.;Finally in Chapter III, we use a small open economy version of the Calvo sticky price model to investigate hybrid inflation/price-level targeting. We explore the proprieties of this kind of targeting regime within a calibrated structural general equilibrium model. We also consider monetary policy in terms of Taylor interest rate rules and conduct a welfare analysis on various specifications. Our analyses show that hybrid targeting performs well and produces quantitatively good results, compared to those regimes that target only price levels or inflation rates. A hybrid regime thus appears to provide a successful method for conducting monetary policy in a small open economy.;Keywords. Equity Premium, Habit Formation, Monetary shocks, Monetary Policy, Small Open Economy, General Equilibrium Model.;Chapter I focuses on the behavior of asset prices in relation to consumption and other business cycle variables. While RBC models have been able to successfully explain the dynamics of macroeconomic variables, they fail to replicate similar interesting stylized facts when studying the behavior of asset prices. In an attempt to solve this shortcoming, some progress has been made in models that modify utility in order to account for habit persistence and incorporate capital adjustment costs. We have developed a framework that combines these ingredients by applying the loglinearly reduced form of the general equilibrium model and the asset pricing formula, based on the lognormality of the disturbance distribution for the small open economy case. Our findings indicate that in a small open economy environment this kind of model fails to account for a substantial equity premium. |
