Empirical estimates of the effect of monetary and fiscal policy on the Japanese current account are provided. To assess the quantitative importance of international monetary factors, these estimates are computed under three different exchange rate regimes: flexible exchange rates, fixed exchange...

This paper was presented at the 2008 International Conference, gFrontiers in Monetary Theory and Policy,h held by the Institute for Monetary and Economic Studies, Bank of Japan, in Tokyo on May 28-29, 2008.

This paper reviews recent developments in the design of monetary policy rules and shows that there are several key similarities between interest rate rules and money supply rules.In particular,both types of rule entail a positive response of interest rates to real output.The paper also shows why...