It's time to scrap the rules that limit budget deficits and let the national governments control their own fiscal policies in the European Union, say the authors.

The focus of this paper is on the extent to which the macroeconomic models developed by the European Central Bank (ECB) and the Bank of England (BoE) are consistent with the 'New Consensus Macroeconomics' (NCM for short). The macroeconometric models are important in two respects. First, they are...

This paper considers the nature and role of monetary policy when money is modelled as credit money endogenously created within the private sector. There are currently two schools of thought that view money as endogenous: one has been labelled the 'new consensus' in macroeconomics, and the other...

Monetary policy has become firmly based on the use of interest rate as the key policy instrument, and in a one instrument--one target framework. The approach to monetary policy is closely associated with the new consensus in macroeconomics (NCM). This paper undertakes a critical appraisal of the...

Since the early 1990s, a number of countries have adopted Inflation Targeting (IT) in an effort to reduce inflation. Most literature has praised IT as a superior framework of monetary policy. We suggest that IT is a major policy prescription closely associated with the New Consensus...

This paper proposes an alternative stability and growth pact among European Union (EU) governments that would underpin the introduction of a single currency and a "single market" within the EU. The alternative pact embraces a number of new aspects of integration within the EU that are based on a...

The paper discusses a range of considerations as to whether the new member countries would benefit from joining EMU, and then to propose alternative criteria for their membership. It begins by rehearsing the 'optimal currency area' arguments, and then consider one aspect of those arguments,...

The SGP has been the focus of growing controversy within the eurozone. The ECB continues to argue that reforming the SGP by relaxing its rules would damage the credibility of the euro. The opposite, however, may be closer to reality. Relaxing the rules according to the measures already taken by...

This paper seeks to evaluate the strength of the case for a financial transactions tax, judged against the three rationales which have been proposed for such a tax: the excessive volume of short-term foreign exchange transactions and their effects on exchange rate volatility; the revenue-raising...

In the first three years of its (virtual) existence, the euro has seen a general decline in its value (notably against the dollar). In this paper we look at this issue and reflect on the implications of the decline for the future of the euro.The paper begins by briefly reviewing some of the...