A growing share of emerging markets (EMs) uses hybrid versions of inflation targeting that differ from the IT regimes of the OECD countries. Real exchange rate and international reserve changes affect the policy interest rates in commodity countries, aiming to stabilize their real exchange rate...

Inflation-targeting central banks around the world often state their inflation objectives with regard to the consumer price index (CPI). Yet the literature on optimal monetary policy based on models with nominal rigidities and more than one sector suggests that CPI inflation is not always the...

The main goal of this paper is to examine the influence of macro factors and the degree of the exchange rate pass-through (ERPT) on aggregate and disaggregate import prices of the industrial sectors in the short- and long-run. The study is based on a model used by Campa and Goldberg (2002) and...

This paper examines the implications of monetary policy rules for exchange rate dynamics. I extend a standard New Open Economy Macroeconomics model with the introduction of a simple money supply rule, whereby central banks change their monetary policy if output diverges from potential output or...

In this paper, we use cross-country and time-series evidence to argue that retail price sensitivity to exchange rates may have increased over the past decade. This finding applies to traded goods as well as to non-traded goods. We highlight three reasons for the change in pass-through into the...

We assess Euro Area financial integration correcting for the role of "onshore offshore financial centers" (OOFCs) within the Euro Area. The OOFCs of Luxembourg, Ireland, and the Netherlands serve dual roles as both hubs of investment fund intermediation and centers of securities issuance by...

This paper assesses the impact of capital inflows and their composition on the real exchange rate and economic growth in developing countries. Capital inflows can directly support economic growth by relaxing constraints on domestic resources, but can also indirectly weaken growth through the...

This paper investigates Original Sin in the West African Economic and Monetary Union in the framework of regional integration and cooperation initiatives. The phenomenon describes the inability of countries to borrow in their currency. The central hypothesis is that smaller South-South...

The financial crises of the late 1990s in Asian and South American countries have once again highlighted the negative implications of development strategies characterized by high levels of foreign currency external indebtedness. In light of these events, South-South cooperation is conceived as...

China's remarkable run of persistently high growth in recent decades is all the more stunning in light of the country's low levels of financial and institutional development, state-dominated economy, and nondemocratic government. Notwithstanding the inefficient and risky growth model, the...