This paper proposes an assessment of the monetary policy performed by the European Central Bank (ECB) and, more specifically this paper investigates to what extent the ECB monetary policy decisions were guided by financial instability signals. Our assessment is achieved by estimating a Taylor's...

Several studies address the importance of the effect of real rigidity on macroeconomic variables. The presence of real rigidity might change the property of optimal monetary policy suggested by the canonical new Keynesian model. We examine optimal monetary policy in an economy with real...

The notion that real money balances is a factor input has attracted considerable amount of attention from researchers and academicians. However, the debate is controversial and the consensus has yet to be developed. This issue becomes more important when a country follows contractionary monetary...

Innovation in financial sector, financial reforms and changes in the policy environment are the factors responsible for instability in the money demanded in an economy. The dawn of 1991 balance of payment crisis in India brought much needed reforms in the economy and financial sector and...

The paper examines the relative significance of monetary aggregates and interest rates in China using the information approach to monetary policy. The analysis reveals the superiority and robustness of a narrow monetary aggregate in contributing information about future movements in inflation.

This paper attempts to provide an alternative method of identifying the bank lending channel in a small open economy at the aggregate level, with emphasis on the degree of the asset substitutability. By testing the long-run relationships underlying a general equilibrium model, our results show...

We assess the relevance of the monetary policy of the ECB in the context of persistent inflation differentials among euro area members and ask whether it takes into account this structural difference. Our results reveal that the ECB has adopted an appropriate monetary policy rule to prevent low...

We estimate forward-looking interest rate reaction functions in the spirit of Taylor (1993) for four major central banks augmented by implicit volatilities of stock market indices to proxy financial market stress. Our results suggest that the Bank of England, the Federal Reserve Bank and the...

This paper investigates the impact of macroeconomic variables on the housing market activity in Turkey covering the period from January 1992 to December 2012. To this aim regime-dependent impulse response and forecast error decomposition analysis are conducted based on a two-regime MS-VAR model....

The aim of the paper is to understand how the financial crisis has affected the interest rate pass-through (PT) in the Eurozone between market rates and bank interest rates. We have applied a SUR-ECM model. This methodology allows testing for the homogeneity of the PT of the euro area countries....