Safe asset shortages can expose the economy to liquidity traps. The nature of these traps is determined by the cyclicality of the bond premium. Self-fulfilling liquidity traps are associated with a counter-cyclical bond premium. Small issuances of government debt crowd out private debt and...

Este estudio reporta estimaciones de una función de reacción de política monetaria para Colombia durante el período 1991 a 1999. Los resultados indican que durante este período el Banco Central adoptó una regla implícita cuyo objetivo era la tasa de inflación. La evidencia también...

From 1999 to 2003, Taiwan faced a deflationary situation. The reasons for this deflation can be attributed to both domestic and global factors. Domestic changes including local political unrest, tensions with China, outbound investment to China, a weakened financial system, and a deteriorating...

In recent papers it is shown that in the presence of price stickiness, investment and capital accumulation activity, active monetary policy (MP) rules can lead to indeterminacy under various assumptions about the structure of the model. We analyze the conditions for real indeterminacy to occur...

In a Common Currency Area (CCA) the Common Central Bank sets a uniform rate of inflation across countries, taking into account the area’s economic conditions. Supposing that countries in recession favor a more expansionary policy than countries in expansion, a conflict of interest between...

This paper considers a new Keynesian model with the cost channel and evaluates the supply-side effects of monetary policy on macroeconomic volatility and welfare, taking into account the endogenous nature of the objective function of monetary authorities. When the cost channel matters,...

Using cointegration and structural vector autoregression (SVAR) techniques this paper investigates the effect of Bank Indonesia's (BI) monetary policy on inflation during the post-1997 crisis monetary-targeting period. Our analysis suggests that BI's monetary policy does not have systematic...

This study analyses the relationship between inflation rate and economic growth rate in the period 1970-2005 in Malaysia. A specific question that is addressed in this study is what the threshold inflation rate for Malaysia. The findings suggest that there is one inflation threshold value exist...

Through a focus on the ever increasing need to address information asymmetries, as well as reference to the uniqueness of the degree to which systemic risks are triggered in banking, this paper aims primarily to highlight reasons why government and central bank intervention are essential and...

This study will shed some light on the debate on the impact of monetary policy on the labour market in Europe. The Phillips curve implies that demand-induced changes in inflation tend to lag behind movements in the unemployment rate, which means that a comparison between the actual unemployment...