Using quarterly data from 1970-1987 we estimate a simple econometric model in which inflation and the money supply are jointly determined and in which expectations of inflation are rational, or forward-looking. The model is estimated using the recently developed `cointegration' principle in...

The paper uses a 'demand for seigniorage revenue' and 'supply of seigniorage revenue' approach to determine the consequences of cuts in public spending for the rate of inflation. Monetary financing is viewed as the residual financing mode, with tax rates and public debt/GDP ratios held constant....

This paper explores the hypothesis that the non-German members of the European Monetary System (EMS) draw benefits from the system because of the monetary discipline that it imposes upon them. The hypothesis explains the dominant position of Germany in the EMS and is consistent with the evidence...

The literature on monetary policy games establishes that policy makers' attempts to boost employment above the 'natural' rate are futile and result in an inflationary bias when wage setters have rational expectations and the policy maker cannot precommit. This implies that a variation of the...

It is often argued that the EMS is an effective disciplinary device for inflation-prone countries in the EEC, since it forces policy-makers in these countries to pursue more restrictive monetary policies than they would otherwise. It is not clear, however, why these countries should submit...

The purpose of this paper is to provide a simple model which illuminates the interdependence between primary commodity prices and the rest of the economy. We study the role of commodity prices in a disinflation program, the role of commodity prices in determining whether or not a fiscal...

In this paper we analyse the use of inflation targeting as a device to facilitate inflation convergence of countries outside EMU to the EMU-inflation rate, and compare it with exchange rate pegging. We find that inflation targeting suffers from a similar credibility problem as a policy of...

This paper investigates the relation between the rise in external debt and fiscal developments in Greece. We use an intertemporal model of optimal private-sector savings to argue that stabilization of the public debt/GDP ratio will be sufficient to stabilize the external debt/GDP ratio as well....

We examine the effect of the minimum wage on restaurant prices. For that purpose, we estimate a price rigidity model by exploiting a unique dataset of individual price quotes used to calculate the Consumer Price Index in France. We find a positive and significant impact of the minimum wage on...

Although for the most part this paper is concerned with others' work, it is not a survey of the literature. Notable omissions are: the shoe-leather effect, the Tobin effect, the real effects of nominal (government) institutions. The first part looks at the relationship between inflation,...