Purpose – The paper analyses the challenges of globalization for exchange rate and monetary policy. Design/methodology/approach – It first deals with the implications of globalization for the choice of an appropriate exchange rate regime. Then it discusses different strategic aspects of...

Many of the EU accession countries have announced that they will not only try to enter the EU as quickly as possible but also to adopt the euro at an early date. This is justified by the effort to avoid the danger of financial instability in the period prior to euro-introduction. However, by...

Recently, it has often been argued that globalization eases the job of central banks as it helps to tame inflation. This is used to argue that central banks (particularly the ECB, referring to the objectives as laid down in the EU-Treaty) could or should reduce their efforts in the fight against...

In this paper we explore the optimal policy reaction to boom-bust cycles in asset prices. Bordo and Jeanne (2002a, b) point to the risks of a reactive strategy that only mitigates the consequences of a crisis if and when it occurs. Acting pre-emptively by rigorously counteracting the build-up of...

By emphasizing the effect of forward-looking price expectations on aggregate demand, the authors investigate the relative performances of two rule policies, i.e., money supply targeting and nominal income targeting. Unlike earlier conclusions reached by C. Bean (1983) and K. D. West (1986), the...

This paper argues that the implications of globalization for monetary policy come mainly through two channels: On the one hand, the many structural changes, which are associated with the globalization process, cause an increase in uncertainty surrounding monetary policy. This leads to an...