The monetary system in Estonia is based on the currency board arrangement with German Mark. The strong commitments and rule-based features of currency board imply that there is no active monetary policy in Estonia – all necessarily monetary djustments are left to the market forces. Under fixed...

This paper describes the Federal Reserve's analytical framework under Volcker and Greenspan, as it was constructed in the early 1980s, during a period of high inflation. It traces the modeling and policy implications of this framework. It discusses the Fed's actual track record and the state of...

This study proposes the adoption of money growth rules as indicator variables of monetary policies by the countries converging to a common currency system, in particular, by the eurozone candidate countries. The analytical framework assumes an inflation target as the ultimate policy goal. The...

In this paper we establish a link between the volatility of oil price shocks and a positive expected value of inflation in equilibrium (inflation premium). In doing so, we implement the perturbation method to solve up to second order a benchmark New Keynesian model with oil price shocks. In...

This study takes stock of the institutional reform of monetary policy in Latin America since the early 1990s. It argues that strengthening the legal independence of central banks, together with macroeconomic policies, was instrumental in reducing inflation from three-digit annual rates in the...

An analytical innovation enhances microeconomics, enabling it to answer all questions of macroeconomics. It combines the production and consumption decisions of the individual in one model. For each individual, it identifies the customers of what he sells, and the suppliers of what he buys. It...

Woodford’s (2003) model of a cashless economy is the basis for his book Interest and Prices. Since Woodford assumes complete markets, this paper explicitly includes state-contingent securities with either temporary money or a cash-in-advance constraint to analyze Woodford’s logic. This...

This report is the final output of the study "Economic and Monetary Union and Enlargement" commissioned by the Directorate-General for Research of the European Parliament in May 1999. An Interim Report was provided in September 1999. The report reviews the mains policy issues concerning the...

A number of commentators have argued that technological innovation is about to change the institutional structure of the retail payments system. Through the potential private issue of currency via new electronic payments systems – electronic money – individuals will create currencies based...