This paper argues that inflation targeting should not be defined too narrowly. The principal objective of a sound monetary policy, namely to provide a credible nominal anchor for the economy, can be achieved with a variety of institutional structures and operational frameworks. It is essential,...

This paper argues that the success of inflation targeting is principally the result of having a clear unambiguous goal, price stability, for monetary policy that is determined not only by the central bank but by the political authorities more generally. With such a goal in place, and with...

While the relationship between volatility and risk is central to much of the financial literature it has not been incorporated systematically into assessment of sovereign debt sustainability. This paper attempts to fill this gap by studying how the probability distribution of sovereign debt to...

A central aspect of the recent debate on global imbalances and the US current account deficit is the role of the exchange rate peg being followed by China and other Asian economies. While one view has stressed the need for Asian currency appreciation, another focuses on the importance of fiscal...

Financial integration in East Asia is actively being pursued and will in due course lead to substantial mobility of capital between economies in the region. Plans for monetary cooperation as a prelude to monetary integration and ultimately monetary unification are also proposed. These plans...

En el presente documento se examinan cuestiones relativas a la secuencia de las reformas que se necesitan para transformar las economiacute;as de Europa oriental en economiacute;as de mercado. Se afirma, en primer lugar, que el proceso de transicioacute;n de estas economiacute;as seraacute; maacute;s...

This paper extends the policy-mix and assignment literature to the flexible exchange rate regime. A model is developed to examine policy-mix questions under floating rates and to gain insights into contemporary policy controversies. After discussing the motivations for current account targets,...

The paper analyzes the determinants of current account imbalances under floating exchange rates. An important goal of the analysis is to provide a framework within which the sources of, and the remedies for the current account imbalances between the United States, Japan, and the Federal Republic...

This paper investigates linkages between stock markets in seven industrialized countries since 1974. Empirical evidence shows that both nominal and real stock prices (and returns) are strongly positively correlated across countries, and that nominal exchange rate changes do not have systematic...

This paper discusses issues related to the sequencing of the reforms that are necessary to transform the economies in Eastern Europe into market economies. It is first argued that the transition path of these economies will be smoother and less costly if a clear statement of the ultimate goals...