This paper considers the optimal degree of monetary-discretion when the central bank conducts policy based on its private information about the state of the economy and is unable to commit. Society seeks to maximize social welfare by imposing restrictions on the central bank's actions over time,...

The issue of the financial crisis draws more and more the specialists’ attention. The monetary policy has a decisive role in monitoring and reducing the inflationary phenomenon as much as possible, since it can become a real danger for an economy during a period of crisis. Inflation is a...

Following the 'Maidan revolution' of February 2014, the National Bank of Ukraine (NBU) abandoned the exchange rate peg to the US dollar and switched to a flexible exchange rate, which was later formalised within the framework of the newly adopted inflation targeting regime. Our analysis suggests...

This paper uses the open economy structural VAR model developed in Buckle, Kim, Kirkham, McLellan and Sharma (2002) to evaluate the impact of monetary policy on New Zealand business cycles and inflation variability and the output/ inflation variance trade-off. The model includes a forward-...

The presently tenuous situation in Turkey will worsen if the government does not take appropriate policy action. In view of foreign investors' loss of confidence, the cost of external financing is likely to rise while consumption and investment will fall, and the Turkish lira would depreciate...

Die derzeit fragile Lage in der Türkei dürfte sich weiter verschlechtern, wenn die Regierung keine wirtschaftspolitischen Maßnahmen ergreift. Angesichts des Vertrauensverlustes des Auslands steigen die externen Finanzierungskosten, Konsum und Investitionen sinken, die türkische Lira wertet...

We estimate monetary policy rules for six central and eastern European countries (CEEC) by taking changes in the policy settings explicitly into account. Distinguishing rather fixed and more flexible exchange rate arrangements we find that for most countries exchange rates played an important...

We develop simple diagrams that can be used by undergraduates to understand interest rate setting by policy-makers. We combine an inflation target, Fisher equation, policy reaction function and short and long run aggregate supply analysis to give a depiction of the policy problem. We illustrate...

Low inflation hit the Japanese economy shortly after the burst of the bubble in stocks and real estate in 1991 and has haunted the domestic economy ever since. The bubbles were partly attributable to prolonged monetary easing in the second half of 1980s, which was conducted to increase domestic...

This paper discusses how monetary policy in Sweden has evolved since 1973. We provide a chronology of the different monetary policy regimes in place during the past fifty years and identify two main regimes, the pegged-but-adjustable exchange rate regime (1973 - 1992) and the inflation targeting...