Three of the most important recent facts in global macroeconomics - the sustained rise in the US current account deficit, the stubborn decline in long run real rates, and the rise in the share of US assets in global portfolio - appear as anomalies from the perspective of conventional wisdom and...

We analyze the effect that real-time domestic and foreign news about fundamentals have on the correlation of stock returns of a small open economy, Portugal, and a large open economy, the U.S. We also study the role of public and private information in the price formation process in the U.S. and...

This paper investigates theoretically and empirically the effect on exchange rates of integrating monetary policy in Europe. It shows that the likely effect will be to generate a tighter European monetary policy (notwithstanding credibility aspects which are not discussed). The argument is that...

Data on output and prices for eleven EC member nations are analysed using a VAR decomposition to extract information on underlying aggregate supply and demand disturbances. The coherence of the underlying shocks across countries and the speed of adjustment to these shocks are compared with the...

This paper analyses whether sovereign default episodes can be seen as contingencies of optimal international lending contracts. The model considers a small open economy with capital accumulation and without commitment to repay debt. Taking first order approximations of Bellman equations, I...

The process of European monetary integration has prompted interest in the study of differences in financial systems and their consequences for monetary transmission mechanisms. This paper analyses the case of a monetary union composed of countries with heterogeneous "credit channels". In order...

The paper argues that this way fo distributing the right to tax presupposes the view that perticular relationships give rise to special obligations.The paper analyses different versions of this approach and discusses to what extent they are able to justify the main features of international tax...

The governance challenges facing the International Monetary Fund (IMF) are not simply limited to representation and voice, and the associated question of quota allocation. The author identifies governance issues that hitherto remained largely ignored by the literature and policy-makers alike....

The author develops and estimates a quantitative dynamic-optimizing model of a small open economy (SOE) with domestic and import price stickiness and capital-adjustment costs. A monetary policy rule allows the central bank to systematically manage the short-term nominal interest rate in response...