According to conventional wisdom, fiscal policy is more effective under a fixed than under a flexible exchange rate regime. In this paper we reconsider the transmission of shocks to government spending across these regimes within a standard new-Keynesian model of a small open economy. Because of...

Understanding how import prices adjust to exchange rates helps anticipate inflation effects and monetary policy responses. This paper examines exchange rate passthrough to the monthly import price index in South Africa during 1980-2009. A methodological innovation allows various short-run...

In recent years the theoretical and empirical literature has shown a tendency to discard the use of money in monetary policy. This paper provides an empirical evaluation of the relevance of monetary aggregates in the conduct of monetary policy in Peru, a small open and partially dollarized...

In contrast to the present consensus view of stabilization policy, theoretical and empirical research strongly support the consideration of supply-side adjustment to pronounced variations of factor-utilization in order to trace a more realistic pattern of macroeconomic adjustment dynamics within...

One of the most difficult issues that monetary authorities in many developing economies have to deal with is the management of a stable price environment. Inflation can create uncertainty, a low level of investment, and raise costs in general, thus lowering rates of growth. As a result, there...

The current paper presents some considerations regarding the monetary policy held by the central bank in order to obtain the declared goal of joining the European Monetary Union. The paper refers to the strategies included in the National Accession Plan, and in the Convergence Program...

Although the Bank of Canada admits asset prices are considered in its policy deliberations because of their effects on inflation or output gap, the Bank of Canada denies trying to stabilize asset prices around fundamental values. However, since the start of the Bank of Canada we have seen a boom...

The economic performances of the Eurozone look weaker than those of the United States overthe period 1999-2006, in spite of the fact that the former applies more thoroughly the 'newmacroeconomics' governance rules concerning public deficits and inflation control. Theliterature emphasizes Alan...

The paper presents both the New Consensus and Keynesian equilibrium within the usual fourcompetitive macro-markets structure. It gives theoretical explanations of the perniciouseffects that the NCM governance, which has been designed for ergodic stationary regimes,brings about in Keynesian...

This paper aims to establish an early warning system for Malaysia to project future financial crises. We investigate the macroeconomic and financial factors in predicting financial crises using the logit econometric model and monthly data with the sample period from January 1980 to December...