This paper addresses the question of the joint conduct of fiscal and monetary policy in a currency union. The problem is studied using a two- country DSGE framework with staggered price setting, monopolistic competition in the goods market, distortionary taxation and nominal debt. The two...

We investigate how the exchange rate regime influences economic linkages across countries. We divide the exchange rate regime into three classifications: currency union, peg and floating exchange rates. Unlike most studies solely focusing on the relationship between anchor and client countries,...

This paper is a pioneering attempt to include India with east and Southeast Asia to study the existence of the economic criteria for a common currency. The analysis in this paper shows that significant complementarities in trade exist among these countries, most of them experience similar shocks...

The paper examines if the seven South Asian countries satisfy the criteria to form an optimal currency area. The empirical part of the paper reveals some positive attributes (such as the existence of positive shocks for major economies like India, Pakistan and Sri Lanka). The paper provides...

Not so much and we should not, at least not yet.

The introduction of a common monetary policy in eleven European countries increased the need for leading indicators for that area. A reliable leading indicator should possess the following properties: (1) The movements in the indicator series should resemble those in the business cycle reference...

A Post-Keynesian Stock-Flow Consistent Macroeconomic Growth Model: Preliminary Results Claudio H. Dos Santos (The Levy Economics Institute) Gennaro Zezza (University of Cassino, Italy, and The Levy Economics Institute) Abstract Stock-flow consistent models may be considered the rallying point...

The aim of this paper is to investigate both the efficacy and the stability properties of monetary policy rules in presence of heterogeneous consumers. We aim to underline the link between the well- known Taylor Principle and the demand-policy regimes, defined on the basis of the monetary policy...

This paper traces the euro zone’s inadequate macroeconomic performance in recent years back to the predominance of a restrictive macroeconomic policy mix based on a ‘new monetarist’ approach to economic policy. An approach based on a (post-)Keynesian analysis is presented as a growth and...

One of the most often discussed features of the Stability and Growth Pact is the rigidity of its 3% deficit rule. In the recent time several reform proposals aim at alleviating the rule in order to allow more room for the automatic stabilizers to operate. As the 3% limit became in the recent...