Intro -- Contents -- I. INTRODUCTION -- II. SOME HISTORICAL PERSPECTIVE -- III. SIMPLE ANALYTICS OF GLOBAL INTEREST RATE DETERMINATION -- IV. AN ASSET-PRICING PERSPECTIVE -- V. ECONOMETRIC EVIDENCE -- VI. CONCLUSIONS -- APPENDIX I. THEORETICAL FRAMEWORK -- REFERENCES.

The extent to which changes in monetary policy rates lead to changes in loan and deposit rates for households and firms, referred to as 'pass-through', is an important ingredient of monetary policy transmission to output and prices. Using data on seven different bank interest rates in 30...

'Leaning against the wind' (LAW) with a higher monetary policy interest rate may have benefits in terms of lower real debt growth and associated lower probability of a financial crisis but has costs in terms of higher unemployment and lower inflation, importantly including a higher cost of a...

Intro -- Contents -- I. INTRODUCTION -- II. STYLIZED FACTS -- III. LITERATURE REVIEW ON THE DETERMINATION OF SPREADS -- IV. BANK SPREADS AND MACROECONOMIC PERFORMANCE -- V. BANK SPREADS IN THE CARIBBEAN: SOME PRELIMINARY EMPIRICS -- VI. ECONOMETRIC ESTIMATION OF BANK SPREADS IN THE CARIBBEAN --...

The analysis in this paper suggests that the large fiscal deficits that Pakistan has experienced over most of the period since 1970 led to some crowding out of private investment, resulting in slower output growth than would otherwise have been observed. Past fiscal deficits have also resulted...

This paper extends a small linear model of the Israeli economy to allow for nonlinearities in the inflation-output process that arise from convexity in the Phillips curve and endogenous monetary policy credibility. We find that the dynamic responses to shocks in the extended model more closely...

Under a flexible inflation targeting regime, should policymakers avoid any reaction to movements in the foreign exchange market? Using data for six advanced open economies explicitly targeting inflation, the paper examines empirically whether real exchange rate disequilibria systematically...

Cambodia became dollarized suddenly in the early 1990s, as a result of massive dollar inflows stemming from a postconflict situation. Considering that the amount of dollars in circulation is unusually high, we attempt to estimate the true degree of dollarization empirically. Our results show...

This paper shows that the response of inflation to external shocks is very different when the authorities target the real exchange rate than when they follow a fixed exchange rate or a preannounced crawling peg. Specifically, shocks that would have no effect on the steady-state inflation rate...

External demand was the main driver of growth in Thailand in 2006 and 2007. However, WEO projections indicate moderating foreign demand in 2008, with U.S. growth being revised downwards to reflect the turmoil in housing and credit markets, and high oil prices. While the share of Thai exports to...