Most OECD countries have experienced a sharp reduction in the volatility of output and inflation over the past three decades. Although this great moderation process has stirred considerable interest in economic and policy circles, research on its causes has so far tended to focus on the US...

We estimate forward-looking interest-rate reaction functions for the G3 economies and for a group of countries which recently adopted inflation targets. Some significant shifts in the conduct of monetary policy are detected in the G3 countries, especially in the USA and Japan. In contrast with...

International comparisons show that countries with co-ordinated wage setting generally have lower unemployment than countries with less co-ordinated wage setting. This paper argues that the monetary regime may affect whether co-ordination among many wage setters is feasible. A strict monetary...