This paper studies to what extent surprise money growth may affect output, employment,and real wages from the supply side. Under nominal wage contracts, we analyze the effects of monetary shocks in a limited participation model. We observe that unanticipated money growth increases real wages,...

Fiscal rules are being increasingly used by both emerging and developed economies. This paper analyzes two alternative fiscal policy rules in terms of their impact on debt sustainability: a rule that fixes the ratio of primary surplus to GDP (quot;fixed surplus rulequot;) and one that sets the...

This is the foreword to ‘Macroprudential Policy' (BIS Paper No. 86) which contains papers presented at the joint Central Bank of the Republic of Turkey (CBRT) - Bank for International Settlements (BIS) - International Monetary Fund (IMF) conference on "Macroprudential policy: effectiveness and...

The shock waves of the 2008-09 global financial crisis and the 2011-12 Eurozone debt crisis hit emerging markets from the trade, the finance and the expectations channels. We focus on the finance channel in this paper. We first discuss the challenges arising from capital flow volatility in...