This study examines the set of indicators of the early warning system used within the framework of the new Macroeconomic Imbalance Procedure introduced by the European Commission. The primary objective of the procedure is to call the attention of member countries to dangerous developments that...

In response to increasing market pressure, EMU countries embarked on a robust consolidation process in 2010 in order to reduce their fiscal deficits and sovereign debt levels. Although – relying on external help in a number of cases – they have been implementing aggressive adjustment...

The debt crisis has brought to the surface key weaknesses in the institutional structure of the EU. The public securities markets of the individual countries have turned out to be potentially just as vulnerable to speculative attacks as fixed exchange rates. It has emerged as an unmanageable...

During the current crisis, the question of how central banks should set their monetary policies after the key policy rate has reached the zero lower bound has provoked heated debates. One idea that has recently received attention is ‘nominal GDP targeting’, which many people believe is worth...

The interest rate policy of the Magyar Nemzeti Bank typically consists of taking several smaller steps in one direction. Other central banks follow similar practices. Their interest rate policy actions are characterised by gradual changes: in other words, they avoid sudden, major changes in...