This paper develops an empirical model of bilateral exchange rate volatility. We conjecture that for developing economies, external financial liabilities have an important effect on desired bilateral exchange rate volatility, above and beyond the standard Optimal Currency Area (OCA) factors. By...

This paper reviews the roles of monetary and fiscal policies in macroeconmic stabilization. In particular, we take acount of interactions between the two policy instruments and ask whether the extent of macroeconomic and policy uncertainty has changed over time, especially with the advent of...

This paper discusses some key issues in the application of dynamic general equilibrium analysis to open economy modelling. In the context of the new open economy macroeconomics paradigm, we focus on: (i) the currency denomination of sticky prices; (ii) the role of the current account and net...

We document a striking empirical regularity: Latin American savings rates are as a rule substantially less procyclical than for OECD countries and in some cases are actually countercyclical. We build a non-representative agent inter-temporal macroeconomic model that rationalizes this phenomenon...

We analyse the prospects for greater monetary integration in Africa, in the wake of EMU. We argue that the structural characteristics of African economies are quite different to the EMU members but that much can be gained from monetary cooperation, as external agency of restraint and in...