This paper investigates whether the degree and the nature of economic and monetary policy interdependence between the United States and the euro area have changed with the advent of EMU. Using real-time data, it addresses this issue from the perspective of financial markets by analysing the...

Endogenous time discounting is introduced in a two-period human-capital-driven growth model: subjective discount rate depends upon the level of human capital. This assumption accords strongly with the micro-level evidence. In the model an individual optimizes consumption over two periods. Low...

Do asset prices affect real activity? This question has taken on a new importance in recent years, as asset values first surged at the end of 1990s and, thereafter, dramatically retreated. This report reviews the available theoretical and empirical evidence regarding asset price and wealth...

Technological progress has long been posited to be crucial in a country's economic growth. This paper argues that coordination failure in a country's new technology investment can be one of the barriers in a country's capital accumulation and economic growth. The global game established by...

This paper is dedicated to the empirical exploration of the welfare effect of expectations and progress per se. Using ten waves of the Russian Longitudinal Monitoring Survey, a panel household survey rich in subjective variables, the analysis suggests that for a given total stock of...

This paper analyzes China's economic performance in the last 25 years and discusses its prospect for growth in the future. China has enjoyed high annual GDP growth rates of about ten percent in the last 25 years. Exports and investment were the two driving forces of the growth process. FDI plays...

Most small island economies or microstates have distinctly different characteristics from larger developing economies. They are more open and vulnerable to external and environmental shocks, resulting in high output volatility. Most of them also suffer from locational disadvantages. Although a...

China monetary policy, as well as its transmission, is yet to be understood by researchers and policymakers. In the spirit of Taylor (1993, 2000), we develop a tractable framework that approximates practical monetary policy of China. The framework, grounded in relevant institutional elements,...

This paper studies the steady-state costs of inflation in a general-equilibrium model with real per capita output growth and staggered nominal price and wage contracts. Our analysis shows that trend inflation has important effects on the economy when combined with nominal contracts and real...

The paper examines the effect of inflation on growth in transition countries. It presents panel data evidence for 13 transition countries over the 1990-2003 period; it uses a fixed effects panel approach to account for possible bias from correlations among the unobserved effects and the observed...