A number of industrialized countries have recently offered inflation-indexed bonds. Some members of another group of countries that had earlier adopted more comprehensive indexation in response to high inflation have taken steps to reduce the scope of indexation in their economies. This paper...

This paper analyzes the evolution of monetary policy in Russia, focusing on the period January 1992–December 1995. Special attention is given to the role of monetary policy instruments. Initially, policy was completely dominated by flows of credit from the Central Bank of the Russian...

The European Monetary Institute has been working with national central banks of the European Union (EU) to prepare instruments for the operation of monetary policy in Stage 3 of European Economic and Monetary Union. Several publications describing the proposed arrangements have been issued. This...

This paper examines the impact of financial market development and liberalization on money demand behavior in Indonesia, Malaysia, Singapore, and Thailand since the early 1980s. The empirical results indicate continuing instability in the interaction of money growth, economic activity, and...

Key medium– and longer–term fiscal issues faced by transition economies are reviewed, including government solvency and the sustainability of the fiscal–financial–monetary program. The paper aims to assist the design and implementation of future Fund programs and to contribute to the...

Pursuit of price stability may, but need not, exacerbate output fluctuations. This paper discusses the monetary strategy of the European Central Bank, the intermediate targets that this should entail, and implications for accountability, transparency, and reputation. Country-specific shocks will...

Central banks may operate perfectly well without capital as conventionally defined. A large negative net worth, however, is likely to compromise central bank independence and interfere with its ability to attain policy objectives. If society values an independent central bank capable of...

A model reflecting the monetary approach to the balance of payments was developed in the International Monetary Fund (IMF) in the 1950s. Its purpose was to integrate monetary, income, and balance of payments analysis, and it became the basis of the conditionality applied to IMF credits....

In recent years, an inflation targeting framework for monetary policy has been adopted in a number of industrial countries. This paper discusses the practical issues that have arisen under the operation of the new framework, and highlights five features of the framework: the assignment of the...

It is shown how the frequency of central bank intervention in financial markets can affect the incentives for economic agents to acquire information, which will be reflected in market prices and thus become available to policy makers. The optimal frequency of intervention, and therefore the...