During the turbulent 1970s and 1980s the Bundesbank established an outstanding reputation in the world of central banking. Germany achieved a high degree of domestic stability and provided safe haven for investors in times of turmoil in the international financial system. Eventually the...

A series of crises and emergency interest rate cuts has brought global interest rates towards zero and government debt to historical records. The paper discusses the exit options from unconventional monetary policies and unsustainable government debt. First, the paper sheds light on the...

Most recent discussion of the relationship between the banking system and macroeconomic performance have focused on the deegree of independence of the central bank as the key variable influencing the choice between inflation and unemployment. This paper argues that the stability of the financial...

The rule bounded currency board-system is a contribution to a process of convergence between the price level of the currency board-country and the anchor currency-country. However this strategy includes the risk of an inadequate provision with liquidity in the currency board-country. In the long...

Inflation persistence has been put forward as one of the potential reasons of divergence among euro area members. It has also been proposed that the new EU Member States (NMS) may struggle with even higher persistence due to convergence factors. We argue that persistence may not be as different...

This note shows that full price indexation is not optimal in the long-run in the New Keynesian model. Moreover, we show that more price stickiness may increase steady state welfare, if price indexation is partial.

Las causas de la explosión de desempleo y de la escasa creación de empleos ocurridas en la Argentina hasta 1995 y sus perspectivas futuras son los dos hilos conductores de este documento. Aquí se presenta una interpretación que se profundiza para el caso de la Argentina.

This paper extends the New Keynesian model to allow for stochastic shifts in the monetary policy regime. Agents cannot observe the regime and use a Bayesian learning rule to make optimal inferences. Price setting is adapted to this environment: lagged expectations about monetary policy influence...