The purpose of the paper is to present a tractable model of an old topic which is becoming more important in macroeconomics: the link between financial structure and economic activity.

This paper attempts to provide an empirical determination of the Philippine central bank's (BSP) recent monetary policy stance, before and after its adoption of the inflation targeting framework, as revealed by its interest rate setting behavior. Employing Clarida, Gali, and Gertler's (1998,...

Fiscal rules are being increasingly used by both emerging and developed economies. This paper analyzes two alternative fiscal policy rules in terms of their impact on debt sustainability: a rule that fixes the ratio of primary surplus to GDP (“fixed surplus rule”) and one that sets the...

This paper is a review of the different approaches on external debt sustainability. The Heavily Indebted Poor Country (HIPC) Initiative was launched to assure a permanent exit from debt dependence. However, the IMF-World Bank program is not without faults, in particular for what concerns debt...

Proper monetary accounting rules are: (1) Central Banks should conform to the practice of the US Federal Reserve to distinguish its Balance Sheet from its Statement of Conditions. (2) Fiat money should not appear as a liability in a Balance Sheet. (3) The Central Bank should not record more...

THE THRUST OF THIS PAPER HAS BEEN TO INVESTIGATE THE THEORETICAL PROPOSITION OF THE MONETARY APPROACH TO THE THEORY OF BALANCE OF PAYMENTS ADJUSTMENT MECHANISM. THE ESSENCE OF THE APPROACH IS A CONSISTENT INSISTENCE THAT BALANCE OF PAYMENTS IS A MONETARY AND NOT A REAL PHENOMENON AS POSITED BY...

The main rationale for fiscal policy rules is the concern for long term sustainability of public finances, that in a monetary union may affect the other members. Among many other criticisms, the Stability and Growth Pact (SGP) has been seen as contradictory or incomplete because it focuses on...

This paper examines the optimal frequency of monetary policy meetings when their schedule is pre-announced. Our contribution is twofold. First, we show that in the standard New Keynesian framework infrequent but periodic revision of monetary policy may be desirable even when there are no...