We examine the effects of the Czech National Bank communication, macroeconomic newsand interest rate differential on exchange rate volatility using generalized autoregressiveconditional heteroscedasticity model. Our results suggest that central bank communicationhas a calming effect on exchange...

This paper investigates why Europe fared particularly poorly in the global economic crisis that began in August 2007. It questions the self-portrait of Europe as the victim of external shocks, pushed off track by reckless policies pursued elsewhere. It argues instead that Europe had not only...

This paper presents statistical analysis supporting stylized facts about sovereign wealth funds (SWFs). It discusses the forces leading to the growth of SWFs, including the role of fuel exports and ongoing current account surpluses, and large hoarding of international reserves. It analyzes the...

Over the last twenty years the level and volatility of inflation decreased across industrial countries. The inflation behaviour can be explained by a shift in monetary policy or by a lucky period of low volatility in business cycle shocks. To test theluck hypothesis we examine the inflation...

We examine the inflation targeting (IT) experiences of emerging market economies, focusing especially on the roles of the real exchange rate and the distinction between commodity and non-commodity exporting nations. In the context of a simple empirical model, estimated with panel data for 17...

Not since the Great Depression have monetary policy matters and institutions weighed so heavily in commercial, financial, and political arenas. Apart from the eurozone crisis and global monetary policy issues, for nearly two years all else has counted for little more than noise on a relative...

Global liquidity provision is highly procyclical. The recent financial crisis has resulted in a flight to safety, with severe strains in key funding markets leading central banks to employ highly unconventional policies to avoid a systemic meltdown. Bagehot’s advice to 'lend freely at high...

The main purpose of this study is to explore the potential expansionary effect stemming from the monetization of debt. We develop a simple macroeconomic model with Keynesian features and four sectors: creditor households, debtor households, businesses, and the public sector. We show that such...

This paper discusses recent UK monetary policies as instances of John Kenneth Galbraith's 'innocent fraud,' including the idea that money is a thing rather than a relationship, the fallacy of composition (i.e., that what is possible for one bank is possible for all banks), and the belief that...

In this paper, I revisit an old question in the analysis of monetary policy that was first studied by Rogoff (1985) - should central banks pursue objectives that differ systematically from social welfare? I investigate how the answer to this question is affected by the degree of transparency...