Despite the vast growth in the theoretical literature on the importance of credibility and reputation in the conduct of monetary and fiscal policy, there is little empirical evidence on these issues available to date. The present paper extents the work of Weber (1988c), which derived empirical...

Most empirical papers on the importance of credibility and reputation for the conduct of economic policies are based on ad hoc models which bear little resemblence to the theoretical models of policy games which have made these concepts popular in the academic literature. The purpose of the...

Turmoil in financial markets causes reflection. Is monetary policy conducted in the most efficient way? Are regulatory and supervisory arrangements adequate when market volatility increases and financial institutions come under stress? In the present SUERF Study, we have collected the...

In exchange rate target zone models the commitment of policymakers to intervene at the boundaries of the band gives rise to speculation which stabilizes exchange rates within the band. The empirical implications of such stochastic process switching are discussed and their relevance for the...