This paper examines the question of whether pegging exchange rates is a good strategy for emerging-market countries. Although pegging the exchange rate provides a nominal anchor for emerging-market countries that can help them to control inflation, the analysis in this paper does not provide...

This paper examines the role of output stabilization in the conduct of monetary policy. It argues that activist monetary policy--in which the monetary authorities focus on output fluctuations in the setting of their policy instrument and in policy statements--is likely to produce worse outcomes...

This essay argues that financial globalization can be a powerful force in promoting economic growth and the reduction of poverty in emerging market countries. Financial development enables the financial system to allocate capital to its most productive uses and is crucial to the success of an...

In recent years, the possibility of an international financial crisis has increased because of greater liquidity of international financial markets, an increase in corporate indebtedness, and the decline of the banking industry. Using an asymmetric information analysis, this paper outlines what...

This paper reexamines tests on the behavior of real interest rates in light of recent results which indicate that regressors are nonstationary and not strictly exogenous. Strong rejections of constancy of real interest rates that have been found previously in the literature are confirmed here....