The ECB has still not decided which monetary policy strategy to pursue from 1999. However, the preparatory work has reduced the posiible alternatives to two: a strategy of intermediate objectives fixed in terms of the quantity of money and a direct inflation targeting strategy. It would be also...

One of the most striking macroeconomic phenomena in recent decades has been the achievement of rather low and more stable rates inflation in many countries in the nineties. Consequently, the main goal of this paper is to offer an overview of the main policy issues arising in a low inflation...

The paper addresses the issue of the role of exchange rate jumps. The short-run dynamics of the peseta's effective exchange rate vis-a- vis OECD countries over the period 1974:1 - 1995:9 is estimated using a PPP-based error-correction model enlarged with additional terms allowing for the...

As the Spanish economy gets more integrated in international markets, competitiveness becomes a key determinant of the monetary transmission. In this paper we trace out the dynamic response of prices, output and the exchange rate following a monetary policy shock. We estimate a structural VAR...

In this paper, the role of the financial position of private agents in the transmission of monetary policy (the balance-sheet channel) is explored. To the extent that officila interest rates are able to affect the market value and the income flows of certain categories of financial instruments...

The fiscal theory of the price level has challenged the conventional view that monetary factors drive prices and exchange rates and has also provided a rationale for fiscal restrictions in a monetary union. This paper reviews the main results and compelling criticisms of this theory, analyzing...