This book provides an in-depth description and analysis of monetary policy in Europe and the United States. Unusually for a volume in the field, it focuses on actual monetary policy---targets, institutions, strategies, and instruments---but traditional and contemporary theoretical approaches to...

The rules of the European Stability and Growth Pact (SGP) were neither strict enough nor enforced strictly enough. We propose a new framework for fiscal policy consolidation in Europe. Centre stage takes a European Consolidation Pact (ECP) supplementing the SGP, with five distinguishing...

Can monetary policy trigger pronounced boom-bust cycles in house prices and create persistent business cycles? We address this question by building heuristics into an otherwise standard DSGE model. As a result, monetary policy sets off waves of optimism and pessimism (“animal spirits”) that...

The paper analyses the role of currency convertibility in the process of economic transition in Eastern Europe and discusses alternative institutional options for achieving this difficult task. It shows that an early transition to convertibility is an indispensable requirement for the success of...

Although there seems to be a broad consensus among economists that purely floating or completely fixed exchange rates (the so-called corner solutions) are the only viable alternatives of exchange rate management, many countries do not behave according to this paradigm and adopt a strategy within...

Can monetary policy trigger pronounced boom-bust cycles in house prices and create persistent business cycles? We address this question by building heuristics into an otherwise standard DSGE model. As a result, monetary policy sets off waves of optimism and pessimism ('animal spirits') that...