Central banks often intervene secretly in the foreign exchange market. This secrecy seems to be at odds with the signalling channel. In this article we will analyse when a central bank intervening in the foreign exchange rate market purely through the signalling channel would prefer to act...

Sometimes two variables Y and Z are each cointegrated with another variable X, but Y and Z do not appear to be cointegrated with each other. This article provides a possible explanation why this might happen.

The Stability and Growth Pact (SGP) aims at reducing the deficit bias and inducing fiscal policy co-ordination in EMU. This article shows that, under positive (demand or supply) shocks, average deficits and interest rates with fiscal co-ordination can be higher than without co-ordination, thus...

Sometimes two variables Y and Z are each cointegrated with another variable X, but Y and Z do not appear to be cointegrated with each other. This article provides a possible explanation why this might happen.

The objective of this article is to compare the outcomes of fiscal coordination under a narrow and a broad agenda in the European Monetary Union (EMU). The EMU (narrow) approach to fiscal coordination will lead to higher volatility of interest rates, output, inflation and average budget deficits...

In this article, we develop a theoretical microstructure model of coordinated central bank intervention based on asymmetric information. We also set up a game where central banks will choose whether to intervene unilaterally or in a coordinated manner, and we study the conditions under which...

The Stability and Growth Pact (SGP) was established to govern discretionary fiscal policy in the European Monetary Union. This article studies the effects created when there is uncertainty about the members’ commitment to respecting the established deficit limits in the SGP. We will show that,...

In this article we use the concept of information sharing from oligopolistic games to analyse the multilateral surveillance of budget positions introduced with the Stability and Growth Pact. In a game between one monetary authority and various fiscal authorities, we will show that the...

The empirical evidence testing the validity of the Rational Partisan Theory (RPT) has been mixed. In this article, we argue that the inclusion of other macroeconomic policies and the presence of an independent central bank can partly contribute to explain this inconclusiveness. This article...