This paper highlights some of the theoretical and practical implications for monetary policy and exchange rates that derive specifically from the presence of a global general equilibrium factor embedded in neutral real policy rates in open economies. Using a standard two country DSGE model, we...

I argue that countries' dollar-denominated net external debt (dollar debt) helps explain the large differences in risk premia across currencies and how U.S. monetary policy affects the global economy. When the U.S. dollar strengthens, the real value of dollar debt increases, weakening the...

We examine the treatment effects of joining the European monetary union on macroeconomic outcomes in the member countries. Specifically, we apply propensity score analysis to mitigate the self-selection bias associated with the non-random nature of joining the union. The findings suggest joining...

This paper analyzes the causes and implications of recent financial crises. Financial crises in general lead to changes in both theory and practice of economics. The paper takes an historical overview. The global consensus of economic theory during the 20th century is discussed. The paper...

Applying basic statistical methods to a large sample of currency crises, it is shown that a variety of measures of monetary policy are significantly related to the outcome of a speculative attack. Unlike in the comparable study of Kraay (1999), discount rates have a significant but...

The study investigated the effect of external economic shocks on monetary policy tools in Nigeria for a period of 1990 to 2020. External economic shocks were measured though their passthrough variables of exchange rate (EXR), foreign direct investment (FDI), external debt (ED), and trade...

The last few years have seen a significant re-evaluation of the models used to analyze crises in emerging markets. Recent models typically stress financial constraints or distorted financial incentives. While this certainly represents progress, these models share a weakness with the earlier...

Firms in emerging markets are exposed to severe financial frictions and credit constraints, that are exacerbated by the sudden stop of capital inflows. Can monetary policy offset this external credit squeeze? We show that although this may be the case during moderate contractions (or in partial...

The paper analyses initiatives undertaken to contain the impact of the sovereign debt crisis and improve economic governance in emu and examines further some fundamental questions about emu’s sustainability looking at emu’s performance for far and at its main strengths and weaknesses. A...

The last few years have seen a significant re-evaluation of the models used to analyze crises in emerging markets. Recent models typically stress financial constraints or distorted financial incentives. While this certainly represents progress, these models share a weakness with the earlier...