Abstract The paper discusses the conduct of monetary policy of the ECB. We estimate monetary policy rules for the sample period 1999 through 2004. The results are in line with the change of the strategy the ECB recently announced. The implied inflation targets that are extracted from the...

Abstract In this paper, we present two models in which the introduction of a “lender of the last resort” significantly affects the banking sector. In the first model, the introduction is stabilizing. However, in the second model it is destabilizing. Both models are very well suited to...