The episode of fiscal crisis in the Euro zone has now become a recurrent theme of debate and has attracted a range of experiences regarding the nature of fiscal turmoil, its causes and effects, which vary widely across individual countries. The confidence in the European monetary system has been...

In this article, I would like to explore some of the thinking around issues in inclusive growth and development in the face of recent economic and financial crisis. We use recent articulations by a cross-section of central bankers and use this as a backdrop for the way the Reserve Bank of India...

A liquidity trap is no longer a mere theoretical curiosity after Japan’s economic slump in the early 1990s and the recent global recession triggered by economic depression in the United States in 2007. Several non-standard policy alternatives have been prescribed to combat a liquidity...

The monetary policy (MP) targets the short end of the yield curve (YC) although real economic activity is dependent upon the medium to long-term market interest rates. Conventional wisdom is that decrease in the MP target rate leads to an immediate decrease in market interest rates, and an...

There is a widespread view that inflation or inflationary expectations are the only way to overcome the zero lower bound on interest rate. This article shows that this is not true. It is shown that a tax-subsidy scheme can be used to overcome the zero lower bound on interest rate—without...

What is the effect of US macroeconomic policy on the business cycle of South Asian economies? The evidence reported in this article suggests that there is little systematic contemporaneous effect of US monetary policy on South Asian GDP. The lagged effect of US monetary policy tends to be...

Walter Bagehot's putative principles of lending in liquidity crises—to lend freely to solvent banks with good collateral but at penalty rates—have served as a theoretical basis for thinking about the lender of last resort for close to 100 years, while simultaneously providing...

To what extent is Greece's current economic crisis the result of monetary policy misalignment between the European Central Bank and Greece? We use a risk adjusted Taylor Rule to examine Greece's monetary policy from 1993 to the present. We argue that the monetary policy of the Bank of Greece...

This paper investigates the transmission of monetary policy by private banks in Brazil during the recent easing cycle. The analysis presented uses a panel dataset with information on lending by private banks in Brazil and concludes that monetary transmission through lending volumes was not...

This paper uses two of the IMF’s DSGE models to simulate the benefits of international fiscal and macroprudential policy coordination. The key argument is that these two policies are similar in that, unlike monetary policy, they have long-run effects on the level of GDP that need to be...