This paper examines the implications of central bank independence for equilibrium macroeconomic performance. The focus is on institutional arrangements governing financial relationships between central banks and ministries of finance, in the presence of competing objectives and constraints...

This paper examines what economic policy has learned from the contemporary developments in economic research and which lessons have been drawn from them for the formulation and the implementation of French economic policy. Advances in research are grouped under three headings: the intertemporal...

We develop a model in which, in order to provide managerial incentives, it is optimal to have costly bankruptcy. If benevolent governments can commit to their policies, it is optimal not to interfere with private contracts. Such policies are time inconsistent in the sense that, without...

The optimal choice of a monetary policy instrument depends on how tight and transparent the available instruments are and on whether policymakers can commit to future policies. Tightness is always desirable; transparency is only if policymakers cannot commit. Interest rates, which can be made...

In standard approaches to monetary policy, interest rate rules often lead to indeterminacy. Sophisticated policies, which depend on the history of private actions and can differ on and off the equilibrium path, can eliminate indeterminacy and uniquely implement any desired competitive...

ABSTRACT: this present study aims at describing the analytical framework of the IMF and WB structural adjustment programs (SAP).It focuses on the theoretical foundation of the SAP and reviews the absorption approach, the monetary approach and the exchange rate approach.

This paper debates the foundations of the principles of macroeconomic policy. It traces through the development of the ideas forming the macroconomic policy and especially the cyclical transition from observance of firmly established rules to discretion and vice versa, to curbing freedom at...

Because of increasing resource prices and thus, higher export profits, resource abundant countries become more and more constrained in implementing a sustainable resource management which realizes two main objectives: The development of competitive non-oil industries and the reduction of...

Traditional macroeconomic policy analysis asks the positive question of how the economy responds to alternative, but exogenous, policy actions or rules. Knowing these responses, the analyst can go to the normative problem of policy advice, The best action or rule is selected, given a specific...

Governments are constantly forced to take decisions based on estimates and forecasts derived from models whose assumptions are not reflected in the daily work of economic agents. But if the theoretical construct on which they are based is at least doubtful, how effective can an indication of...