W. A. Barnett originated the Divisia monetary aggregates, using Diewert's results on superlative index numbers and Barnett's derivation of the user cost of monetary asset services. The resulting Divisia index can be interpreted as a first moment aggregating over growth rates with expenditure...

In this paper, I provide a rationale for why money should earn interest; or, what amounts to the same thing, why risk-free claims to non-interest-bearing money should trade at discount. I argue that interest-bearing money is essential when individual money balances are private information. The...

This paper argues that a stable broad money demand for the euro area over the period 1980-2011 can be obtained by modelling cross border international portfolio allocation. As a consequence, model-based excess liquidity measures, namely the difference between actual M3 growth (net of the...

The traditional economic theory suggests that changes in the money supply or in the interest rates can influence the business cycle, but not the long-run potential output. In other words, monetary policy is neutral over the long-run. In this paper we use some new developments in econometrics to...

We compare the behavior of short term interest rates in hard-peg and floating-exchange-rate countries. We use a framework which allows both domestic and foreign factors to play a role in the determination of interest rates and assess them empirically for eight Latin American countries between...

The liberalisation of capital flows makes in the Romanian economy vulnerable to the important and presumably unstable capitals.

Following the New Classical Macroeconomics and the New Keynesian Macroeconomics, the independence of central banks significantly increased after 1990, which could preclude the coordination between the fiscal and the monetary policies. The purpose of this paper is to consider the stabilizing...

The Maastricht Treaty provided the blueprint for achieving Economic and Monetary Union (EMU) as a further stage in the process of political and economic integration of the European Union (EU). In order to qualify to participate in EMU, Member States were required to achieve a high degree of...

Since the writing of David Hume, in the eighteenth century, there has been a general agreement amogst economists that an increase in the stock of money leads, initially, to an increase in economic activity. Most writer have attributed the real effects of money, in the short run, to mistaken...

This paper examines how the fixed exchange rate policy followed in Cyprus for more than 40 years helped to deliver price stability amid high growth rates and low unemployment, and contributed to the successful adoption of the euro. The paper identifies some critical elements for the success of...