The European sovereign debt crisis revived the discussion concerning the pros and cons of exchange rate adjustment in the face of asymmetric shocks. Exit from the euro area is to regain rapidly international competitiveness. Exchange rate stability with structural reforms could be beneficial for...

The European sovereign debt crisis revived the discussion concerning the pros and cons of exchange rate adjustment in the face of asymmetric shocks. Exit from the euro area is to regain rapidly international competitiveness. Exchange rate stability with structural reforms could be beneficial for...

This paper explores the welfare effects of the seniority requirement of the international lender of the last resort (ILLR). An ILLR with seniority decreases the interest burden of the country because ILLR accepts a lower interest rate due to the higher chance of getting repaid. On the other...

Current discussions among major economists finds significant disagreement in defining the status of the global economy. This article examines the main themes in the context of the theories presented on savings, consumption and investment. The primitive society concept of “limited good”...

Using a neoclassical monetary model, we investigate the welfare cost of a payment system that operates as a real-time gross settlement (RTGS) system. We illustrate how the cost of such systems does not ultimately derive from factors such as "payments gridlock" but instead from the credit...

This article analyzes the work of the late Dr. William Vickrey, the McVickar Professor Emeritus of Columbia University and 1996 Nobel-laureate in Economics. In choosing Vickrey for the Nobel prize, the Royal Swedish Academy of Sciences notes Vickrey's fundamental contributions to the economic...

We propose a new methodology to assess intermediaries’ substitutability in financial networks featuring higher-order structures (credit intermediation chains). We represent the financial network as a hyperstructure and each credit intermediation chain as a hyperedge. This approach allows us to...

The paper compares the credibility of currency boards and (standard) pegs. Abandoning a currency board requires a time-consuming legislative process and an abolition will thus be previously expected. Therefore, a currency board solves the time inconsistency problem of monetary policy. However,...

Exchange market pressure (EMP) measures the pressure on a currencyto depreciate. It adds to the actual depreciation a weightedcombination of policy instruments used to ward off depreciation,such as interest rates and foreign exchange interventions, where theweights are their effectiveness. The...

This paper analyzes institutional arrangements for exchange rate systems and reviews what we know. It looks at the foreign exchange market, different balance of payment situations in which countries find themselves and the necessary exchange rate adjustments. It studies the options that are...