The prospect of central banks issuing digital currency (CBDC) immediately raises the question of how this new form of money should co-exist and interact with existing forms of money. This paper evaluates three different scenarios for the implementation of CBDC in terms of their monetary policy...

The extent to which foreign exchange (FX) market interventions impact on changes in the spot exchange rate and prices of consumer goods and services still remain an open question. Using non-recursive structural vector autoregression (VAR) model, we examine the interactions between the...

This case study explains the inconsistency of the Slovenian currency. Struggling to become an independent country, Slovenia gained its independence in the early 1990s. As Slovenia develops into an independent country, gaining monetary independence was a necessity for them to stand strong as a...

This paper imagines a world in which countries are on the Bitcoin standard, a monetary system in which all media of exchange are Bitcoin or are backed by it. The paper explores the similarities and differences between the Bitcoin standard and the gold standard and describes the media of exchange...

The paper analyses the current exchange rate policy of Bangladesh under various criteria and then assesses the feasibility of a floating rate regime under these various criteria. It looks at factors such as the involvement with international capital markets, share of trade with the...

The Target imbalances within the Eurozone can be interpreted as a sign of a missing balance of payments adjustment mechanism for the member countries. As the Eurozone lacks a fiscal union, in economic theory it is more an exchange rate union or a system of fixed exchange rates than a monetary...

The debate regarding the usage of domestic currency versus dollarizing an economy is still robust in many developing countries. Dollarizing an economy commonly entails dollarizing bank deposits and loans, transacting in dollars and tagging prices of goods and services in dollar. In Tanzania,...

This paper applies a novel approach to study the impact of different shocks on the price level. It uses a classical dichotomy model with monetary policy regime shifts at known dates. First, there was a regime dominated by money, afterwards a regime driven by the exchange rate and a third one...

A dynamic general equilibrium model of an open economy with staggered wages is constructed. We analyse disinflation through pegging the exchange rate. In accordance with the stylised facts, an initial boom in output can result, depending on the exact level of the peg. The reason is an element of...

This document proposes a general macroeconomic framework to analyze the behavior of inflation. This approach has two characteristics. The first is the distinction of monetary regimes based on the number of shocks that have a permanent effect on the price level. When all shocks have a permanent...