In many developing and developed countries, government debt stabilization is an important policy issue. This paper models the strategic interaction between the monetary authorities who control monetization and the fiscal authorities who control primary fiscal deficits. Government debt dynamics...

The replacement of national currencies by a common currency in the EMU causes a monetary externality if the European Central Bank is inclined to monetize part of outstanding government debt in the community.High government debt in one part of the EU then increases the common inflation rate.We...

The expectations trap hypothesis is an influential but untested model of monetary policy. The hypothesis conjectures that high inflation during the 1970s was the outcome of a shift in private sector beliefs which were then validated by monetary policy. The subsequent fall in inflation was mainly...

Charlotte Economics Club, Charlotte, NC President Charles Plosser gives his views on the U.S. economy and discusses why it is important to take a longer-term view of economic data. He also discusses why he is advocating for the Fed to publish a Monetary Policy Report with an assessment of the...

We study the evolution of the response of scal policy to monetary policy shocks in the EMU in the light of two important events: the signing of the Maastricht treaty in 1992 and the introduction of the EMU in 1999. Based on impulse responses from a panel VAR, we nd that scal and monetary policy...

The aim of this research is understanding role of the National bank of Serbia in maintaining monetary stability. Monetary stability means the achievement of low and stable inflation rate. Through the instruments of monetary policy, the central bank seeks to achieve the inflation target, in order...

Rapid developments and crises in financial markets assign new roles to central banks in ensuring financial stability. To this extent, central banks are in the quest for new monetary policies and for developing the instruments that give the most effective results in the changing financial...

Mainstream thinking seems to support the idea that once a financial crisis <i>ends</i> everything returns to normal. At the most, some regulatory changes on capital and reserves of the banks could be required. However, to understand what really happens during financial crises and the changes in overall...

One of the main contributions of modern money theory (MMT) has been to explain why monetarily sovereign governments have a very flexible policy space. Not only can they issue their own currency, but also any self-imposed constraint on budgetary operations can be easily bypassed. Through a...

Standard simple-sum monetary aggregates, like M3, sum up monetary assets that are imperfect substitutes and provide different transaction and investment services. Divisia monetary aggregates, originated from Barnett (1980), are derived from economic aggregation and index number theory and aim to...