During the 1970s and early 1980s, Spain suffered high rates of inflation but inflation declined and by 1997 inflation had fallen to approximately 2 percent. To fight inflation, Spain implemented austere monetary programs, joined the EMS in 1989, enacted central bank autonomy in 1994, and...

The paper addresses the issue of the role of exchange rate jumps. The short-run dynamics of the peseta's effective exchange rate vis-a- vis OECD countries over the period 1974:1 - 1995:9 is estimated using a PPP-based error-correction model enlarged with additional terms allowing for the...

The potential negative consequences of high financial volatility have been an important concern recently. Although its empirical relevance has not been proved conclusively, clear theoretic and intuitive arguments justify this concern. Many efforts have been conducted, therefore, to determine...