This paper investigates the transmission mechanism of monetary policy and inflation targeting in a small open-economy by using backward-looking of aggregate supply (AS) and aggregate demand (AD) framework. Since September 1998 until July 2005, Malaysia has implemented a currency pegged to the...

Purpose – The purpose of this paper is to evaluate the role of human capital technology spillovers across countries in converging their growth rates. Design/methodology/approach – This paper develops a closed form mathematical endogenous growth model and applies it to a small open economy...

The Federal Reserve, the nation's central bank, is also the U.S. government's bank. As fiscal agents of the United States, the Federal Reserve Banks provide the Department of the Treasury with services related to the federal debt-receiving bids for auction of Treasury securities and processing...

Recent declines in the U.S. current account and fiscal balances have sparked renewed debate over the twin-deficit hypothesis, which argues that a larger fiscal deficit, through its effect on national saving, leads to an expanded current account deficit. This study reviews international evidence...

Between 1977 and 1997, real government spending in New York and New Jersey rose more than 40 percent, led by sharply higher outlays for public welfare and education. Increased tax revenues offset the spending hikes, allowing the states to run large cash surpluses in most years, but both states...

This article demonstrates that a fiscal expansion can induce both a short- and long-run depreciation of a currency and, by parallel arguments, fiscal contraction can induce short- and long-run appreciation. This possibility hinges on a country being a debtor with at least some of its debt...

In this paper, we examine the likely consequences for the sustainability of fiscal policy of pursuing goals that rely on restrictive ceilings on deficits and debt. We provide a formal theoretical framework for analyzing the sustainability of fiscal policy based on the government intertemporal...