New revision and acceptance: “Indicator Variables for Optimal Policy under Asymmetric Information,” (with Michael Woodford, Princeton University), June 2002, Journal of Economic Dynamics and Control, forthcoming.

New paper: “Optimal Policy with Partial Information in a Forward-Looking Model: Certainty-Equivalence Redux,” (with Michael Woodford, Princeton University), June 2002.

Discussion of Sebastian Edwards and Igal Magendzo, “A Currency of One’s Own? An Empirical Invistigation on Dollarization and Independent Currency Unions” at the Sveriges Riksbank and IIES Conference on Monetary Policy and Financial Markets in an Enlarged EU, Stockholm, May 17-18, 2002.

New briefing paper: “A Reform of the Eurosystem’s Monetary-Policy Strategy Is Increasingly Urgent,” May 2002.

New discussion written up: “Comments on Nancy Stokey, ‘Rules and Discretion’ after Twenty-Five Years,” 17th Annual Conference on Macroeconomics, NBER, Cambridge, MA, Apr 5-6, 2002.

New revision: “Money and Inflation in the Euro Area: A Case for Monetary Indicators?” (with Stefan Gerlach, Hong Kong Monetary Authority), April 2002. The predictive performance of the output gap has improved, most likely because of better estimation methods.

Discussion of Frank Smets and Rafael Wouters, “Monetary Policy in an Estimated SDGE Model of the Euro Area,” at the conference “Macroeconomic Models for Monetary Policy,” Federal Reserve Bank of San Francisco, Mar 1-2, 2002.

New interview: “Bordering on Abuse,” (in Swedish) in Dagens Industri, February 15, 2002, on the Riksbank’s Governing Board’s plan to obey, against the Executive Board’s recommendation, the Government’s request to hand over 20 bn kronor ($2 bn) of the Riksbank’s capital to the Government in order to contribute to the Government’s budget.

Discussion of Thomas Laubach and John C. Williams, “Measuring the Natural Interest Rate,” American Economic Association Annual Meeting, Atlanta, Jan 4-6, 2002.

Discussion of Athanasios Orphanides and John C. Williams, “Imperfect Knowledge, Inflation Expectations, and Monetary Policy,” Econometric Society North American Winter Meeting, Atlanta, Jan 4-6, 2002.

New briefing paper: “Sweden and the Euro,” Jan 2002.

New paper: “Inflation Targeting: Should It Be Modeled as an Instrument Rule or a Targeting Rule?” Dec 2001, European Economic Review, forthcoming.

New paper: “The Inflation Forecast and the Loss Function,” Version 1.1, Dec 2001.

New revision: “What Is Wrong with Taylor Rules? Using Judgment in Monetary Policy through Targeting Rules,” Version 2.05, November 2001.

Old paper made available: “Term, Inflation, and Foreign Exchange Risk Premia: A Unified Treatment,” NBER Working Paper No. 4544, November 1993. (IIES Seminar Paper No. 548). Paper.

Abstract
The paper reviews the theoretical foundations of the use of forward interest rates to infer expected future rates of interest, inflation, currency depreciation and inflation differentials. Forward rates are related to these expected future variables via combinations of term, inflation and foreign exchange risk premia. A unified derivation, discussion and comparison of these premia is provided under both general and specific assumptions, as well as some comments on empirical estimation.