How should monetary policy respond to a commodity price shock in a resource-rich economy? We study optimal monetary policy in a simple model of an oil exporting economy to provide a first answer to this question. The central bank faces a trade-off between the stabilization of domestic inflation...

The article discusses the relationship between the central bank balance sheet, the monetary base, monetary aggregates and credit in the euro area. In particular, it looks at the choice of the operational procedures available to the central bank, and for this purpose it compares the current...

As far as the control of inflation is concerned, the interest rate is the most important monetary instrument. This paper examines the effectiveness of the interest rate policy in controlling inflation. The model utilized in this paper considers both demand and supply side effects of interest...

We estimate monetary policy rules for six central and eastern European countries (CEEC) by taking changes in the policy settings explicitly into account. Distinguishing rather fixed and more flexible exchange rate arrangements we find that for most countries exchange rates played an important...

Following the intensification of the international financial crisis in autumn 2008, the functioning of the financial system was seriously hindered. Central banks around the world responded firmly by lowering their key interest rates to historically low levels. As financial conditions did not...

The accelerated deterioration of the worldwide economic climate which occurred as a consequence of the deepening financial crisis following the Lehman Brothers bankruptcy in the autumn of 2008 created a new context in which most central banks were forced to come up with unprecedented solutions....

An extraordinary consensus on the goals and conduct of monetary has been undermined by the international financial crisis and the faltering recovery in many economies. There is an evident need to pay closer attention to developments of asset markets and in the financial sector, which has opened...

In 1967 Milton Friedman delivered “The Role of Monetary Policy’ as his presidential address to the American Economic Association (AEA). In its published version – Friedman (1968) – it has become, arguably, the most influential paper in modern monetary economics and was...

This article develops time-series models to represent three alternative, potential monetary policy regimes as monetary policy returns to normal. The first regime is a return to the high and volatile inflation rate of the 1970s. The second regime, the one that most Federal Reserve officials and...

Die Europäische Zentralbank erhebt seit Mitte 2014 Negativzinsen für Bankeinlagen. Seit Herbst letzten Jahres wird diese Entwicklung von einigen Banken an Privatanleger mit sehr hohen Gesamteinlagen weitergegeben. Hans-Peter Burghof, Universität Hohenheim, sieht in einem »Minuszins« einen...