This article relates to the choice of the optimal monetary policy during a currency crisis. Aghion, Bacchetta and Banerjee (1999, 2000, 2001) show that a restrictive monetary policy is optimal if economy is strongly in debt in foreign currency and if the effect of credit channel is weak....

This article suggests a new type of reaction function fitting monetary policymaker's behaviour when constrained by a fixed exchange rate. Firstly, it incorporates new target variables, which are different from the ones commonly observed by central banks in a flexible exchange rate environment....

This paper constructs a consistent series for the market value of UK Government debt over almost 300 years. We analyse how monetary and fiscal policy affect the path of the price level in the UK. Specifically, the paper examines the interactions between debts, deficits, the monetary base and the...

This paper examines the consequences of introducing firm specific capital into a selection of commonly used sticky price business cycle models. We find that modelling firm-specific capital markets greatly reduces the response of inflation to changes in average real marginal cost. Calibrated to...

This paper empirically assesses the impact of exchange rate policy on the performance of manufactured exports for four North African countries over the 1970-92 period. The impact of exchange rate policy is examined through the effect of three indicators: real effective exchange rate (RER)...

The Euro will be introduced gradually from 1999 to 2002. On 1 January 1999 the rates of conversion between the Euro and the Participating national currencies will be irrevocable fixed and the Euro will become a currency in its one right. At this date enterprises can begin operating in Euro. On...

The Maastricht Treaty provided the blueprint for achieving Economic and Monetary Union (EMU) as a further stage in the process of political and economic integration of the European Union (EU). In order to qualify to participate in EMU, Member States were required to achieve a high degree of...

This is the report to the European Commission of an expert group whose terms of reference are to consider whether banks are entitled to charge for conversion to the euro, whether they intend to do so, whether any new rules are necessary at EU level and how to ensure the transparency of any...

Price versus productivity indexing is considered in a model of monetary policy with wage bargaining. The wage-indexing rule is negotiated in a first stage of the game between government, union and firm.