Country members of EMU as well as the United States have improved their fiscal positions during the course of the past decade. This article considers the impact of further government debt and deficit reductions in the EMU area. First the literature on government finance establishing the role of...

This paper examines whether Europe's monetary union framework of "ins" and "outs" reflects differences in market structures underpinned by relatively immobile labour. Such a situation could give rise to sufficient nominal convergence to satisfy the entry requirements to EMU, but little real...

We study the effects of Central Bank transparency on inflation and the output gap. We thus identify a small analytical model which concludes that transparency affects the variability of inflation and output and not their average levels. Then we examine whether this conjecture holds empirically,...

We study inflation targeting under uncertainty. Although uncertainty in the values of structural parameters makes the policy maker naturally more cautious, it does not immediately lead to the optimal monetary policy rule. We examine thus whether there exists a policy rule that improves welfare...

We provide a framework for analysing the choice between optimal and robust rules in the presence of paradigm uncertainty in monetary policy. We thus provide two issues: first, we discuss the conditions of uncertainty that render a robust rule a preferable substitute to optimal rules and second,...

The paper presents a guide to the theoretical properties of EUROMON, the Nederlandsche Bank's multi-country model for implementing policy analysis. It is written with a view to expanding Chapter 2 of the DNB Monetary Monograph 19, which provides for a model description. EUROMON is an aggregate...

We perform four simulations with the multi-countrymodel EUROMON illustrating both upwards and downward risks to future inflation in the Euro area. We examine how different sources of inflation can affect, first, the Euro area as a whole in comparison to the US, and second, compare the effects...

We study the implications of uncertainty for ination targeting. We apply Brainard's static framework which imposes multiplicative uncertainty in the monetary transmission. Brainard's main result is that in the presence of uncertainty, monetary authorities become naturally more cautious. But this...

This paper examines whether Europe's monetary union framework of "ins" and "outs" reflects differences in market structures underpinned by relatively immobile labour. Such a situation could give rise to sufficient nominal convergence to satisfy the entry requirements to EMU, but little real...

The literature argues that the benefits of an independent Central Bank accrue at no cost to the real side. In this paper, we argue that the lack of correlation between monetary autonomy and output variability, is due to the proactive role of fiscal policy when faced with rigid monetary...