The study analyses the characteristics of professional exchange rate forecasts for the /US-$ rate. The results indicate that the quality of forecasts produced by profes-sional economists is rather poor and incompatible with the rational expectations hy-pothesis. This dismal result is according...

The first three years of European Monetary Union provide a good basis for a comprehensive analysis of this unprecedented and controversial monetary arrangement. The paper starts with a short discussion of the recent changeover to Euro notes and coins and the general difficulties with the...

This note shows that the Svensson versus McCallum and Nelson controversy battled in the Federal Reserve Bank of St. Louis Review (September/ October 2005) can be mapped into a static version of a New Keynesian macro model that consists of an IS-equation, a Phillips curve and an inflation...

This paper explores whether the cost channel solves the price puzzle. We set-up a New Keynesian DSGE model and estimate it for the euro area by adopting a minimum distance approach. Our findings suggest that - under certain parameter restrictions which are not rejected by the data - the cost...

This paper presents a New Keynesian model that dwells on the role of banks in the cost channel of monetary policy. Banks extend loans to firms in an environment of monopolistic competition by setting the loan rate according to a Calvo-type staggered price setting approach, which means that the...

This paper addresses the credit channel in Germany by using aggregate data. We present a stylized model of the banking firm, in which banks decide on their loan supply in the light of uncertainty about the future course of monetary policy. Applying a vector error correction model (VECM), we...

Sterilized foreign exchange market interventions are commonly dismissed by economists as an ineffective policy instrument. Nevertheless many central banks operating under independently floating exchange rates regimes are often engaged in sales and purchases of foreign exchange in order to...

In diesem Beitrag wird die Entwicklung des Bestandes an Devisenreserven des Eurosystems im Verlauf des Jahres 1999 untersucht. Um mit dem zur Verfügung stehenden Datenmaterial eine sinnvolle Analyse durchführen zu können, muss der von der EZB in Euro ausgewiesene Bestand unter...

For the open economy the workhorse model in intermediate textbooks still is the Mundell-Fleming model, which basically extends the IS-LM model to open economy problems. The purpose of this paper is to present a simple New Keynesian model of the open economy, that introduces open economy...

Over the last decade a new consensus model has emerged in monetary macroeconomics, labelled New Keynesian macroeconomics (Clarida et al., 1999). It consists of three simple building blocs: a forward-looking IS-equation that is derived from the optimization problem of a representative household,...