Previous research on the incompatibility of a pegged exchange rate, capital mobility, and monetary independence (the open-economy trilemma), based on the degree to which domestic interest rates follow foreign rates, has produced mixed results. Despite its centrality to other areas of...

Adherence to a pegged exchange rate regime has the potential to affect inflation in two ways: by instilling monetary discipline and by altering the relationship between money and prices, because shocks to the money stock are absorbed partly by changes in the balance of payments. Although the...

The theory of investment cycles in planned economies is reviewed, and a formal model is presented and tested on data from Eastern Europe and the U.S.S.R. The results suggest that over time consumption has been increasingly protected against fluctuations in investment, and that the relationship...

The impact of central bank independence and wage-bargaining structure on inflation and unemployment is explored theoretically and tested empirically for a sample of seventeen OECD countries over two separate periods. The results suggest that inflation is lower in economies with greater central...