We carry out a number of policy simulations with DNB's multicountry model, EUROMON. With these simulations we aim to analyse the effectiveness of monetary and fiscal expansion in light of the current global downturn in the US and the Euro area. We thus run two types of simulations in which we...

Country members of EMU as well as the United States have improved their fiscal positions during the course of the past decade. This article considers the impact of further government debt and deficit reductions in the EMU area. First the literature on government finance establishing the role of...

This paper examines whether Europe's monetary union framework of "ins" and "outs" reflects differences in market structures underpinned by relatively immobile labour. Such a situation could give rise to sufficient nominal convergence to satisfy the entry requirements to EMU, but little real...

The creation of Monetary Union in Europe has specified a centralised role for the monetary instrument but has left the fiscal instrument within the nations' jurisdiction. It remains unclear how national fiscal policies will interact with the common monetary policy and whether there will be...

We study inflation targeting under uncertainty. Although uncertainty in the values of structural parameters makes the policy maker naturally more cautious, it does not immediately lead to the optimal monetary policy rule. We examine thus whether there exists a policy rule that improves welfare...

We study the implications of uncertainty for ination targeting. We apply Brainard's static framework which imposes multiplicative uncertainty in the monetary transmission. Brainard's main result is that in the presence of uncertainty, monetary authorities become naturally more cautious. But this...

The independent nature of the Central Bank is often associated with achieving low and stable inflation. Further to that the merits of independence are stretched to achieving low(er) output variability when compared to a government run monetary policy. In this paper we use the Alesina and Alesina...

This paper investigates the effect of the external wealth position of the Netherlands on the Dutch trade balance. Contrary to intuition which allows net creditors to run a trade deficit, the Netherlands has over a period of years be running trade surpluses. To explain this paradox, not unique to...

The independent nature of the Central Bank is often associated with achieving low and stable inflation. Further to that the merits of independence are stretched to achieving low(er) output variability when compared to a government run monetary policy. In this paper we use the Alesina and Alesina...