How do financial markets price new information? This paper analyzes price setting atthe intersection of private and public information, by testing whether and how thereaction of financial markets to public signals depends on the relative importance ofprivate information in agents’ information...

The increasing weight of open market transactions in central bank operations and the widening use of purchase agreements underlines a progress towards convergence of monetary policy instruments and procedures in EU countries. This paper presents a survey of features of open market operations...

This paper provides empirical evidence on the use of monetary policy instruments and procedures (MPIP) in EU countries. In particular, it focuses on three important issues which arise in this context. Fist, we examine the structural position of the EU money markets. Second , evidence is...

Using the Consensus Economics dataset with individual expertforecasts from G7 countries we investigate determinants of disagreement (crosssectionaldispersion of forecasts) about six key economic indicators. Disagreementabout real variables (GDP, consumption, investment and unemployment)has a...

The ECB Working Paper Series seeks to disseminate economic research on issues that are relevant to the various tasks and functions of the ECB. The Series invites submissions of research work by ECB staff and visitors. Papers by researchers not affiliated with the ECB may also be considered for...

Monetary Policy Committees differ in the way the interest rate proposal is preparedand presented in the policy meeting. In this paper we show analytically how differentarrangements could affect the voting behaviour of individual MPC members andtherefore policy outcomes. We then apply our results...

Existing work on wage bargaining (as exemplified by Cukierman and Lippi, 2001) typicallypredicts more aggressive wage setting under monetary union. This insight has not beenconfirmed by the EMU experience, which has been characterised by wage moderation,thereby eliciting criticism from Posen and...

We consider a simple extension of the basic new-Keynesian setup in which we relaxthe assumption of frictionless financial markets. In our economy, asymmetricinformation and default risk lead banks to optimally charge a lending rate above therisk-free rate. Our contribution is threefold. First,...

Money demand is probably one of the most extensively studies economic relationships in applied economics. While useful surveys of existing literature are available, much of the attention ahes focused on the United States. However, a considerable number of papers have recently been produced...

This paper investigates the importance of labor market institutions for inflation and unemployment dynamics. Using the New Keynesian framework we argue that labor market institutions should be divided into those institutions that cause Unemployment Rigidities (UR) and those that cause Real Wage...