This paper investigates why Europe fared particularly poorly in the global economic crisis that began in August 2007. It questions the self-portrait of Europe as the victim of external shocks, pushed off track by reckless policies pursued elsewhere. It argues instead that Europe had not only...

This paper analyses the influence of the exchange rate regime of a country on the level of tolerated corruption with a special focus on the interdependency of monetary and fiscal policies. Using a simple theoretical framework based on Barro-Gordon-Model I compare independent monetary policy with...

Recent slowdown of economic growth forces Russian political authorities to seek for policy measures to support economic activity. Monetary expansion is considered as one of the possible alternatives, which we consider inappropriate. During the whole post-crisis period monetary authorities of...

The recent experience with low inflation has reopened interest in the liquidity trap; which occurs when the nominal interest rate reaches its zero lower bound. To reduce the real interest rate, and to stimulate the economy, the modern literature highlights the role of high inflationary...

The democratic accountability of policymaking institutions which are autonomous within delegated mandates has not received as much attention as their independence. We analyze in a theoretical model the effects of accountability in the form of possible overriding of economic policy decisions by...

In this paper we derive optimal monetary targeting rules under various assumptions about fiscal behavior. In contrast to the existing literature we use a linear-quadratic approach and allow for dynamic games between the two policy authorities. It is shown that optimal monetary behavior is...

It is widely argued that Europe`s unified monetary policy calls for international coordination at the fiscal level. We survey the issues involved in such coordination in the perspective of macroeconomic stabilization. A simple model identifies the circumstances under which coordination may be...

The association between economic and financial stabilities and influence of macroeconomic policies on the financial sector creates scope of active policy role in financial stability. As a contribution to the existing body of knowledge, this study has analysed the implications of macroeconomic...