2024-03-28T11:36:28Zhttp://aei.pitt.edu/cgi/oai2
oai:aei.pitt.edu:391
2011-02-15T22:15:28Z
7374617475733D707562
7375626A656374733D44:44303031:44303031303337
7375626A656374733D44:44303035:69646F7067:69646F7067646D706D
7375626A656374733D44:44303035:44303035303130
7375626A656374733D44:44303031:4430303170707061
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303031:6D656469616D65646961
74797065733D776F726B696E677061706572
Policy Transfer in The European Union: Institutional Isomorphism as a Source of Legitimacy. JMWP No. 10.97, September 1997
Radaelli, Claudio M.
tax policy
media
public policy/public administration
monetary policy
European Commission
decision making/policy-making
The paper examines public policy in the European Union (EU) by drawing upon the conceptual framework of policy transfer, which has been recently refined by comparativists, and the concept of isomorphism developed within organizational theory. Three case studies of EU policy transfer - namely monetary policy, tax policy, and media ownership policy - are discussed and compared for assessing the potential of isomorphism for the analysis of policy diffusion. The author argues that European institutions, which have a serious political limitation in terms of legitimacy, stimulate policy transfer by catalysing isomorphic processes which diffuse throughout the EU national policy solutions to collective problems. By contrast, policy transfer is severely constrained when there are no national cases to be imitated. In this circumstance, however, European institutions, most notably the European Commission, can overcome the problem by ‘inseminating’ solutions into national political systems.
Barbagallo, Valentina
1997-09
Working Paper
PeerReviewed
text/html
http://aei.pitt.edu/391/1/jmwp10.htm
Radaelli, Claudio M. (1997) Policy Transfer in The European Union: Institutional Isomorphism as a Source of Legitimacy. JMWP No. 10.97, September 1997. [Working Paper]
http://aei.pitt.edu/391/
oai:aei.pitt.edu:569
2011-02-15T22:15:47Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303035:44303035303039
74797065733D636F6E666572656E63655F6974656D
"The Euro’s Impact on Money and Capital Markets"
Jong, Han de
Berg, Bert van den
Wijngaer, Rob van de
monetary policy
European Central Bank
EMU/EMS/euro
At the start of the Third Stage of EMU, it was by no means clear whether the ECB would succeed in setting up an efficient framework for distributing liquidity throughout the euro-zone. Now in retrospect, however, the ECB appears to have been quite successful. In this paper, we will look at the major impact of the ECB's operational framework on the daily business of the euro area money market. We will also examine whether the ECB has in fact succeeded in creating a uniform monetary policy resulting in similar liquidity costs in all participating countries. And we will elaborate on the development of the various segments of the money market. In addition to trade volumes, we will focus on money market integration and the extent to which EMU has affected market efficiency compared with that of the predecessor markets. Finally, we will present a number of conclusions and identify factors that continue to hamper the optimal functioning of the market.
2000
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/569/1/3%2DAMRO%2DThe%20euro's%20impact%20on%20money.pdf
Jong, Han de and Berg, Bert van den and Wijngaer, Rob van de (2000) "The Euro’s Impact on Money and Capital Markets". In: UNSPECIFIED, Maastricht, The Netherlands.
http://aei.pitt.edu/569/
oai:aei.pitt.edu:571
2011-02-15T22:15:48Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303035:44303035303039
74797065733D636F6E666572656E63655F6974656D
"The monetary policy framework of the ECB"
Bofinger, Peter
European Central Bank
monetary policy
In this short presentation I cannot discuss the concrete definition of the ECB’s final target which is an increase of the harmonised index of consumer prices in the euro area of "below 2 percent". Thus, I will focus on the monetary policy framework that the ECB has developed in order to achieve its target.
2000
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/571/1/5%2DBofingerMain%20%2DThe%20monetary%20policy%20framework%20of%20the%20ECB.pdf
Bofinger, Peter (2000) "The monetary policy framework of the ECB". In: UNSPECIFIED.
http://aei.pitt.edu/571/
oai:aei.pitt.edu:623
2011-02-15T22:15:58Z
7374617475733D707562
7375626A656374733D46:46303032
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
Attractive prices and euro-rounding effects on inflation. NBB Working Paper Nr. 17
Aucremanne, Luc
Cornille, David.
Belgium
monetary policy
EMU/EMS/euro
Approximately 70% of Belgian consumer prices are to be considered as attractive prices, namely psychological prices, fractional prices - i. e. prices which are convenient to pay - and round prices. Conversion of these prices into euro generally leads to prices which are no longer attractive and it is very likely that retailers will round their prices to attractive euro prices. The public fears that rounding will be upward rather than symmetric. This paper simulates in the first instance a worst-case scenario, whereby all attractive BEF prices are systematically rounded up to the nearest attractive euro price. The effect on the consumer price index ranges from 0.54 to 0.72%. Such a scenario is however very unlikely, as factors such as competition on product markets, the currently prevailing demand conditions, the commitments made by organisations representing the enterprise sector and the vigilant attitude of consumers restrain the possibility of rounding up. In order to obtain a more realistic picture, the paper investigates in a second step whether rounding-up effects were found after the major change in VAT rates in April 1992. These effects seem marginal, although it should be acknowledged that it was difficult to isolate rounding effects from regular price changes. Any ex post assessment of the euro changeover will face a similar identification problem.
2001-11
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/623/1/WP17.pdf
Aucremanne, Luc and Cornille, David. (2001) Attractive prices and euro-rounding effects on inflation. NBB Working Paper Nr. 17. [Working Paper]
http://aei.pitt.edu/623/
oai:aei.pitt.edu:625
2011-02-15T22:15:58Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D636F6E666572656E63655F6974656D
"The role of the exchange rate in economic growth: a euro-zone perspective"
MacDonald, Ronald
monetary policy
EMU/EMS/euro
In this paper we consider a range of topics which connect exchange rates to the economic growth process. In particular, we first of all outline the basic properties of exchange rates when they are flexible. One key feature of flexible exchange rates is that they are highly volatile and such volatility may affect growth through the channels of trade and investment. These channels are considered in some detail in this paper. We also consider the links between sectoral and aggregate growth and the exchange rate, using the Balassa-Samuelson and Houthakker-Magee-Krugman hypotheses. The main conclusion of the paper is that the current exchange rate arrangements for the euro-zone area, both internal and external, are likely to stimulate economic growth.
2000-05
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/625/1/WP9.pdf
MacDonald, Ronald (2000) "The role of the exchange rate in economic growth: a euro-zone perspective". In: UNSPECIFIED, Brussels, Belgium.
http://aei.pitt.edu/625/
oai:aei.pitt.edu:658
2011-02-15T22:16:05Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
Openness, imperfect exchange rate pass-through and monetary policy. NBB Working Paper Nr. 19
Smets, Frank
Wouters, Raf
monetary policy
EMU/EMS/euro
This paper analyses the implications of imperfect exchange rate passthrough for optimal monetary policy in a linearised open-economy dynamic general equilibrium model calibrated to euro area data. Imperfect exchange rate pass through is modelled by assuming sticky import price behaviour. The degree of domestic and import price stickiness is estimated by reproducing the empirical identified impulse response of a monetary policy and exchange rate shock conditional on the response of output, net trade and the exchange rate. It is shown that a central bank that wants to minimise the resource costs of staggered price setting will aim at minimising a weighted average of domestic and import price inflation.
2002-03
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/658/1/WP19.pdf
Smets, Frank and Wouters, Raf (2002) Openness, imperfect exchange rate pass-through and monetary policy. NBB Working Paper Nr. 19. [Working Paper]
http://aei.pitt.edu/658/
oai:aei.pitt.edu:662
2011-02-15T22:16:06Z
7374617475733D707562
7375626A656374733D46:46303032
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303035:69646F7067:69646F706768646F63
74797065733D776F726B696E677061706572
The use of robust estimators as measures of core inflation. NBB Working Paper Nr. 2
Aucremanne, Luc.
Belgium
monetary policy
historical development of EC (pre-1986)
This paper examines robust estimators of core inflation for Belgian historical CPI data, and for euro area Harmonised Indices of Consumer Prices. Evidence of fat tails in the cross-sections of price changes is provided by traditional measures, as well as by a robust measure of the tail weights that is not vulnerable to the masking phenomenon. Trimmed means are considered in the first instance. We introduce a new estimator where the optimal trimming percentage is the lowest percentage for which the hypothesis of normality of the trimmed samples cannot be rejected on the basis of the Jarque-Bera statistic. Two variants are considered, one with a constant and one with a time-varying optimal trimming percentage. The latter has a higher breakdown point. Symmetric and asymmetric trimming are considered as well. Another robust estimator, the one-step Huber-type skipped mean, which is less vulnerable to the masking phenomenon, is also examined. It is shown that the robust estimators outperform the traditional core inflation measures found in the literature. However, as traditional measures, they lag rather than lead observed inflation. This was particularly so in the 70s and the 80s when the oil price shocks had substantial second-round effects on Belgian inflation.
2000-03
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/662/1/WP2.pdf
Aucremanne, Luc. (2000) The use of robust estimators as measures of core inflation. NBB Working Paper Nr. 2. [Working Paper]
http://aei.pitt.edu/662/
oai:aei.pitt.edu:663
2011-02-15T22:16:06Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
Model-based inflation forecasts and monetary policy rules. NBB Working Paper Nr. 1
Wouters, Raf
Dombrecht, Michel
monetary policy
In this paper, the interaction between inflation and monetary policy rules is analysed within the framework of a dynamic general equilibrium model derived from optimising behaviour and rational expectations. Using model simulations, it is illustrated that the control of monetary policy over the inflation process is strongly dependent on the role of forward looking expectations in the price and wage setting process and on the credibility of monetary policy in the expectation formation process of the private sector. Furthermore, the central bank should take into account a wide variety of indicators in making monetary policy decisions in order to approach the optimal monetary policy rule as closely as possible.
2000-03
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/663/1/WP1.pdf
Wouters, Raf and Dombrecht, Michel (2000) Model-based inflation forecasts and monetary policy rules. NBB Working Paper Nr. 1. [Working Paper]
http://aei.pitt.edu/663/
oai:aei.pitt.edu:719
2011-02-15T22:16:06Z
7374617475733D707562
7375626A656374733D46:46303036
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303035:69646F7067:69646F706768646F63
74797065733D776F726B696E677061706572
Exchange Rate Stability and Political Accountability in the European Monetary System. University of Illinois EUC Working Paper, Vol. 1, No. 1
Bernhard, William T.
France
historical development of EC (pre-1986)
monetary policy
EMU/EMS/euro
The European Monetary System (EMS) created a policy standard—exchange rate stability—which domestic constituents could use to evaluate their government’s policy choices. Domestic social coalitions in favor of macroeconomic discipline could punish governments that violated this standard. I test the argument that devaluations within the EMS negatively affect the devaluing government’s approval ratings by using the London School/Hendry approach to model the approval ratings of the French prime minister and president from 1981–1992. The results indicate that devaluations did hurt the government’s approval ratings. I contend that the domestic political cost for violating the focal point of exchange rate stability provided member governments with an additional incentive to pursue disciplined economic policies throughout the 1980s. The incentive to avoid currency devaluations also helped to shape the response to the twin shocks of German monetary unification and the Maastricht Treaty. Since realignment would have damaged their domestic popularity, member governments were unwilling to adjust their parities, leading to the collapse of the EMS.
2002-02
Working Paper
NonPeerReviewed
text/plain
http://aei.pitt.edu/719/1/WTB.txt
application/msword
http://aei.pitt.edu/719/2/WTB.doc
Bernhard, William T. (2002) Exchange Rate Stability and Political Accountability in the European Monetary System. University of Illinois EUC Working Paper, Vol. 1, No. 1. [Working Paper]
http://aei.pitt.edu/719/
oai:aei.pitt.edu:1717
2011-02-15T22:19:43Z
7374617475733D707562
7375626A656374733D46:46303236
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303031:6575726F7065616E69736174696F6E6575726F7065616E697A6174696F6E6E6174696F6E616C6964656E74697479
7375626A656374733D44:44303035:69646F7067:69646F706768646F63
74797065733D636F6E666572656E63655F6974656D
The Disadvantage of tying One's Hands: The Rise and Fall of the Europeanisation of British Monetary Policy
Buller, Jim.
U.K.
europeanisation/europeanization & European identity
monetary policy
EMU/EMS/euro
historical development of EC (pre-1986)
[From the Introduction]. This paper attempts to do three things. It begins by charting the rise and fall of the Europeanisation of British monetary policy over the last two decades or so. It goes on to ask why the Europeanisation of British monetary policy (in the form of ERM membership) became so controversial in the 1990s. Finally, it concludes by asking whether there is a connection between the events of Black Wednesday and present Treasury reluctance to join the euro. The main argument developed below is that Europeanisation took place initially as a method of depoliticising British economic management (taking the politics out of policy-making). However, it became controversial because it was criticised for locking policy-makers into a course of action which appeared to set them at odds with the demands of many of the electorate. Put another way, objections to Europeanisation in this case were as much to do with democracy (or a particular understanding of democracy) rather than sovereignty. The Blair Government has continued to resist membership of the euro because it too perceived the institutions of the eurozone to be too rigid and remote from political interference. To join is to once again risk being tied to a policy which may threaten the legitimacy of the party in office.
2003
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/1717/1/buller.pdf
application/msword
http://aei.pitt.edu/1717/2/Buller_19.9.03.doc
Buller, Jim. (2003) The Disadvantage of tying One's Hands: The Rise and Fall of the Europeanisation of British Monetary Policy. In: UNSPECIFIED, Sheffield, UK.
http://aei.pitt.edu/1717/
oai:aei.pitt.edu:1823
2011-02-15T22:20:13Z
7374617475733D707562
7375626A656374733D44:44303033:44303033303032
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303032:44303032303035
74797065733D776F726B696E677061706572
Who needs foreign banks? CEPS Working Document No. 185, September 2002
Gros, Daniel.
EU-Central and Eastern Europe
enlargement
monetary policy
This paper shows that countries with weak banking system and fiscal institutions, might benefit from the presence of foreign banks, which can constitute a commitment and transparency device. Foreign banks can also reduce the probability of self-fulfilling speculative attacks. A strong presence of foreign banks can make a currency peg feasible in the first place by rendering it more resistant to speculative attacks. The European experience is instructive in this respect. In all of the candidate countries from Central and Eastern Europe (CEEC) the banking system is now dominated by foreign banks. This is now taken for granted, but it is unusual if one looks at the existing EU-15 members, where foreign banks play a marginal role in even the smallest economies.
2002-09
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/1823/1/WD185.PDF
Gros, Daniel. (2002) Who needs foreign banks? CEPS Working Document No. 185, September 2002. [Working Paper]
http://aei.pitt.edu/1823/
oai:aei.pitt.edu:1832
2011-02-15T22:20:16Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
Seigniorage: An Argument for a National Currency?. CEPS Working Document No. 174, October 2001
Schobert, Franziska.
monetary policy
Seigniorage has often been mentioned as one of the most important and most readily quantifiable arguments for a government not to give up its monopoly in base money. The analysis shows that the measurement of seigniorage may lead to very different results and that it eventually depends on the monetary environment, in which central banks issue and manage base money. For less advanced countries in Central and Eastern Europe seigniorage has only been fiscally significant in high inflationary economies and even then the success in exploiting seigniorage has been limited. Widespread currency substitution has contributed to the results. Governments in these countries which are willing to stabilise prices but which lack crediblity to do so, may be increasingly interested in euroisation. More advanced EU accession countries have received low revenues from having a national currency over the recent years. Seigniorage has arisen as a by-product of other central bank’s objectives such as price and exchange rate stability. This caused high sterilisation costs and valuation gains of the central banks asset portfolio have often been the main reason for positive results of seigniorage. In search for a viable monetary regime and in face of further liberalisations of capital markets these countries may look at euroisation as a choice to achieve price stability without exchange rate volatility.
2001-10
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/1832/1/WD174.PDF
Schobert, Franziska. (2001) Seigniorage: An Argument for a National Currency?. CEPS Working Document No. 174, October 2001. [Working Paper]
http://aei.pitt.edu/1832/
oai:aei.pitt.edu:1842
2011-02-15T22:20:18Z
7374617475733D707562
7375626A656374733D44:44303031:44303031303138:656C6D6C61626F75726C61626F72
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303035:44303035303039
74797065733D6F74686572
Asymmetries in European Labour Markets and Monetary Policy in Euroland. ENEPRI Occasional Paper No. 1, September 2003
Gros, Daniel
Hefeker, Carsten.
labour/labor
monetary policy
European Central Bank
[From the Introduction]. The present paper addresses some of the key issues the ECB would have to address to make the best of this combination of asymmetric labour markets and a common monetary policy. Research on these issues is widely scattered because both labour market and monetary policy specialists mainly just look at their own field. Hence, one purpose of this paper is to bring together two strands of the literature. The preliminary results suggest that the ECB may be well advised to reconsider its decision-making process. Further, since these asymmetries would pose less of a problem if labour markets were flexible and adapted more or less smoothly to changes in the economic environment, it is also important to analyse how far the attempts to liberalise European labour markets have progressed.
2003-09
Other
NonPeerReviewed
application/pdf
http://aei.pitt.edu/1842/1/ENEPRI_OP1.pdf
Gros, Daniel and Hefeker, Carsten. (2003) Asymmetries in European Labour Markets and Monetary Policy in Euroland. ENEPRI Occasional Paper No. 1, September 2003. UNSPECIFIED.
http://aei.pitt.edu/1842/
oai:aei.pitt.edu:1844
2011-02-15T22:20:18Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303035:69646F7067:69646F706768646F63
74797065733D776F726B696E677061706572
Time-Varying Nairu and Real Interest Rates in the Euro Area. ENEPRI Working Paper No. 24, October 2003
Logeay, Camille
Tober, Silke.
historical development of EC (pre-1986)
monetary policy
EMU/EMS/euro
This paper analyses the Nairu in the euro area and the influence that monetary policy had on its development. Using the Kalman-filter technique we find that the Nairu has varied considerably since the early 1970s. The Kalman-filter technique is applied here for the first time using explicit exogenous variables. In particular, real interest rates were found to explain a quarter of the increase in the Nairu between 1980 and 1995. This indicates the possibility of a long-run nonsuperneutrality of monetary policy.
2003-10
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/1844/1/ENEPRI_WP24.pdf
Logeay, Camille and Tober, Silke. (2003) Time-Varying Nairu and Real Interest Rates in the Euro Area. ENEPRI Working Paper No. 24, October 2003. [Working Paper]
http://aei.pitt.edu/1844/
oai:aei.pitt.edu:1866
2011-02-15T22:20:25Z
7374617475733D707562
7375626A656374733D44:44303031:44303031303138:656C6D6C61626F75726C61626F72
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
Asymmetric Labour Markets in a Converging Europe: Do differences matter? ENEPRI Working Paper No. 2, January 2001
Barrell, Ray
Dury, Karen.
labour/labor
monetary policy
Asymmetric economic structures across Europe may result in common shocks having asymmetric effects. In this paper we investigate whether the differences in the structure and dynamics that we observe in the European economies matter for policy design. In particular it is widely believed that labour market responses are different, with the structure of labour demand and the nature of the bargain over wages differing between countries. In addition the European economies move at different speeds in response to common shocks. In this paper we construct three different models of Europe, one where the labour market relationships are separately estimated and assumed to be different, one where the most statistically acceptable commonalties are imposed and one where common labour market relationships are imposed across all member countries. We use panel estimation techniques to test for the imposition of commonalties among countries. We find that it is possible to divide Europe into sub-groups, but it is not possible to have one model of European labour markets. We use stochastic simulation techniques on these different models of Europe and find that the preferred rule for the ECB is a combined nominal aggregate and inflation-targeting rule. We find that while this rule is dominant in all our models, the more inertia that is introduced into the labour markets, the more a nominal aggregate-targeting rule alone may be preferred. However, we conclude, that differences in the labour market transmission mechanisms across the European countries appear to have little influence on the setting of monetary policy for the ECB, although this depends on the relative importance of the different components in the welfare loss function.
2001-01
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/1866/1/ENEPRI_WP02.pdf
Barrell, Ray and Dury, Karen. (2001) Asymmetric Labour Markets in a Converging Europe: Do differences matter? ENEPRI Working Paper No. 2, January 2001. [Working Paper]
http://aei.pitt.edu/1866/
oai:aei.pitt.edu:1995
2011-02-15T22:20:49Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D706F6C6963797061706572
Basel II: The Remaining Issues. CEPS Policy Brief No. 13, March 2002
Meier-Ewert, Moritz.
monetary policy
[From the Introduction]. ...the BCBS has wisely decided to prolong the consultation period for another year, so that the final draft Accord is expected by the end of 2002. It is to be hoped that these potential problems of the new Accord are solved by then. In this context, it is the aim of this paper to briefly outline four issue-areas that must be addressed before the new Accord can be implemented with confidence. After a broad outline of the current state of the proposals in section one, each area will be discussed in turn. Thus, the second section focuses on the issue of a potential decline in the overall capital holdings and hence in the level of protection against systemic risk. The third section then considers the strong procyclical effect that the new proposals are likely to have. Section four looks at the various adverse consequences the Accord may have for developing countries, and the fifth section outlines the potential impact on the structure of the banking industry. Section six concludes.
2002-03
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/1995/1/PB13.pdf
Meier-Ewert, Moritz. (2002) Basel II: The Remaining Issues. CEPS Policy Brief No. 13, March 2002. [Policy Paper]
http://aei.pitt.edu/1995/
oai:aei.pitt.edu:2014
2011-02-15T22:20:53Z
7374617475733D707562
7375626A656374733D44:44303035:44303035303130
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666165636F6E6F6D6963706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303035:69646F7067:69646F706768646F63
74797065733D776F726B696E677061706572
Macroeconomic and Monetary Policy-making at the European Commission, from the Rome Treaties to the Hague Summit. NBB Working Paper Nr. 58, August 2004
Maes, Ivo.
monetary policy
economic policy
European Commission
historical development of EC (pre-1986)
This paper discusses macroeconomic and monetary policy-making at the European Commission, covering the period from the Rome Treaties to the Hague Summit. It is based on an analysis of public documents, archival research and interviews with former policy-makers. The paper starts with an overview of the economic philosophy of the Rome Treaties and senior macroeconomic policy-makers at the Commission, followed by an analysis of economic developments in the 1960s. Thereafter, the focus is on three crucial macroeconomic policy documents of the period: the European Reserve Fund project in 1958, the Commission's Action Programme for the Second Stage of the EEC of October 1962 and the Barre [Barr] Memorandum of October 1969. [The Barr Plan I-III are on the Archive in the AEI-EU section - search for Barr]. The Commission’s objectives tended to be both defensive, preserving the "acquis communautaire", especially avoiding recourse to the safeguard clauses, and pro-active, stimulating the process of European integration. From an analytical point of view, the Commission focussed on the compatibility of policies between the Member States. Gradually, a typical Commission analysis developed, based on a blending of German convergence ideas with the French medium-term approach. The paper further illustrates the ascent of the Commission as an actor in the monetary area, notwithstanding the relatively limited provisions of the EEC Treaty.
2004-08
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/2014/1/WP58.pdf
Maes, Ivo. (2004) Macroeconomic and Monetary Policy-making at the European Commission, from the Rome Treaties to the Hague Summit. NBB Working Paper Nr. 58, August 2004. [Working Paper]
http://aei.pitt.edu/2014/
oai:aei.pitt.edu:2015
2011-02-15T22:20:53Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D41:41303239
74797065733D776F726B696E677061706572
Forecasting with a Bayesian DSGE Model: An Application to the Euro Area. NBB Working Paper Nr. 60, September 2004
Smets, Frank
Wouters, Raf.
monetary policy
EMU/EMS/euro
integration theory (see also researching and writing the EU in this section)
In monetary policy strategies geared towards maintaining price stability conditional and unconditional forecasts of inflation and output play an important role. In this paper we illustrate how modern sticky-price dynamic stochastic general equilibrium (DSGE) models, estimated using Bayesian techniques, can become an additional useful tool in the forecasting kit of central banks. First, we show that the forecasting performance of such models compares well with a-theoretical vector autoregressions. Moreover, we illustrate how the posterior distribution of the model can be used to calculate the complete distribution of the forecast, as well as various inflation risk measures that have been proposed in the literature. Finally, the structural nature of the model allows computing forecasts conditional on a policy path. It also allows examining the structural sources of the forecast errors and their implications for monetary policy. Using those tools, we analyse macroeconomic developments in the euro area since the start of EMU.
2004-09
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/2015/1/WP60.pdf
Smets, Frank and Wouters, Raf. (2004) Forecasting with a Bayesian DSGE Model: An Application to the Euro Area. NBB Working Paper Nr. 60, September 2004. [Working Paper]
http://aei.pitt.edu/2015/
oai:aei.pitt.edu:2100
2011-02-15T22:21:14Z
7374617475733D756E707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303035:44303035303039
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D636F6E666572656E63655F6974656D
"EMU: Balancing credibility and legitimacy in the policy mix"
Hodson, Dermot
Maher, Imelda.
monetary policy
fiscal policy
European Central Bank
EMU/EMS/euro
The paper first discusses monetary policy, outlining the debates and the balance between the independence and accountability of the ECB, before turning to fiscal policy where the main mechanisms and institutions involved in the formation and enforcement of policy are analysed. The loose institutional structures allowing for coordination of employment policy are then discussed. The article finally explores the tensions between credibility and legitimacy before concluding that adequate attention must be paid to the legitimacy of policy so as to ensure an effective policy mix with an appropriate balance as between credibility and legitimacy.
2001
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/2100/1/002114.PDF
Hodson, Dermot and Maher, Imelda. (2001) "EMU: Balancing credibility and legitimacy in the policy mix". In: UNSPECIFIED, Madison, Wisconsin. (Unpublished)
http://aei.pitt.edu/2100/
oai:aei.pitt.edu:2113
2011-02-15T22:21:17Z
7374617475733D756E707562
7375626A656374733D46:46303037
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D636F6E666572656E63655F6974656D
"Monetary power, bargaining asymmetries and the structural logic of EU exchange rate cooperation"
Kaelberer, Matthias.
Germany
monetary policy
The first section of this paper defines the terms "weak" and "strong" currency countries and analyzes the balance of payments positions of the EU member countries. It emphasizes Germany's role as the primary strong currency country in the EU and explains the broad coalition patterns that evolved over time among strong and weak currency countries in European monetary politics. The second section explains the logic of macroeconomic adjustment for weak and strong currency countries. Because they do not face a reserve constraint, strong currency countries have much greater freedom to choose their preferred adjustment option than weak currency countries. Section three explains how much this asymmetry in adjustment options shapes the logic of bargaining over rules of monetary cooperation. Strong currency countries are often in a superior bargaining position and, therefore, tend to yield stronger leverage over bargaining outcomes.
2001
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/2113/1/002122_1.pdf
Kaelberer, Matthias. (2001) "Monetary power, bargaining asymmetries and the structural logic of EU exchange rate cooperation". In: UNSPECIFIED, Madison, Wisconsin. (Unpublished)
http://aei.pitt.edu/2113/
oai:aei.pitt.edu:2138
2011-02-15T22:21:23Z
7374617475733D756E707562
7375626A656374733D44:44303035:69646F7067:69646F7067646D706D
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D636F6E666572656E63655F6974656D
"Policy co-ordination and economic adjustment in EMU: Will it work?"
Mayes, David G.
Viren, Matti.
monetary policy
EMU/EMS/euro
decision making/policy-making
The EU has set in place a series of mechanisms to try to co-ordinate fiscal, "structural" and monetary policies in order to achieve the objectives of EMU for the 12 members. All of these mechanisms are unique and untried. There is single monetary policy run by the combination of the national central banks and the new European Central Bank under the umbrella of the Eurosystem. There are restrictions on the scope of the member states' fiscal policies, which remain a national responsibility, and attempts to encourage co-ordination and discourage tax competition. Structural policies are governed by the processes of "soft co-ordination,"involving the setting of objectives and mutual surveillance. In comparison with the U.S. these measures look rather limited. The basis for their structure owes more the practicalities of what could be agreed than to some careful assessment of the needs of efficient and effective policy. This paper reviews the mechanisms and provides an empirical assessment of this policy structure in practice. We show that while there are problems in running a single monetary policy for a diverse area, the main problems do not relate to co-ordination among macro-economic policies. The policy balance is not necessarily going to be biased and fiscal policies are not inhibited from the diversity necessary to reconcile the differences among the member states. Co-ordination provides a benefit particularly to smaller countries. Initially the incentives behind soft co-ordination appear to be having an effect but structural change is traditionally the most difficult to effect.
2001
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/2138/1/002189.PDF
Mayes, David G. and Viren, Matti. (2001) "Policy co-ordination and economic adjustment in EMU: Will it work?". In: UNSPECIFIED, Madison, Wisconsin. (Unpublished)
http://aei.pitt.edu/2138/
oai:aei.pitt.edu:2201
2011-02-15T22:21:40Z
7374617475733D756E707562
7375626A656374733D46:46303036
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D636F6E666572656E63655F6974656D
"Economic volatility, inflation-output trade-off variability and the challenges to social democratic egalitarianism in Europe: Informed speculation and preliminary evidence"
Varghese, Robin.
France
monetary policy
This paper examines a challenge to instituting more egalitarian incomes policies in Europe posed by economic uncertainty and the consequent volatility in economic outcomes, specifically the variance in the profit rate of firms. Rising variance in the profit rate increases costs of equality in the form of foregone proportion of the surplus generated as well as threatening a larger number of firms with bankruptcy. Unlike appeals to specialization resulting from open trade, this explanation centers on dilemmas that can affect firms also at the sector level. Rising variance in firm profit rates, and thus wage dispersion, are tied to shifts in demand management and monetary policy that result in changes in the sacrifice ratio or the output-employment loss for disinflation. The sources of shifts in the sacrifice ratio, in so much as they rest in conservative monetary policy and increased capital mobility, imply different consequences for egalitarianism ... [e]vidence from the recent experience of income distribution and shifts in macroeconomic policy in France suggests [that] increases in the profit variance stemming from changes in macroeconomic policy towards a more conservative stance do negatively affect the degree of equality of wages. It concludes with speculation about the consequences of European monetary policy for the project of equality and the pressures for reform that may be generated by the European Central Banks conservative monetary stance.
2001
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/2201/1/002665_1.PDF
Varghese, Robin. (2001) "Economic volatility, inflation-output trade-off variability and the challenges to social democratic egalitarianism in Europe: Informed speculation and preliminary evidence". In: UNSPECIFIED, Madison, Wisconsin. (Unpublished)
http://aei.pitt.edu/2201/
oai:aei.pitt.edu:2236
2011-02-15T22:21:50Z
7374617475733D756E707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:44303031303339:74706A6861706A63636D67656E6572616C
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303035:44303035303039
7375626A656374733D44:44303035:44303035303033
74797065733D636F6E666572656E63655F6974656D
“ECOFIN-11 and the European Central Bank: A Rational Choice Perspective”
Campanella, Miriam L.
monetary policy
general
European Central Bank
Council of Ministers
EMU/EMS/euro
Drawing from a public choice perspective, this paper challenges the dominant normative view that in order to fill the lack of accountability in the ECB statute (Eijffinger, 1998) a fitting democratic interlocutor should be created. (Tabellini, 1998). Though a normative approach may prove to be limited in real application, but useful as a regulative principle, the paper takes a realistic stance. It considers the limited provision of accountability not as a technical defect, but as a result of a deliberate political design to weaken ECB in its capacity of consensus building. Under providing a central bank with accountability creates smoke screens for governments looking for re-election. By shifting attention toward euro governments’ preferences, the paper finds that the EMU project incorporates such a constraint. In Section 1, after reviewing the rationale of delegation of monetary policy, which is at the basis of independence status, the paper finds how, little room, instead, is devoted in the Maastricht Treaty to the issue of accountability. Section 2 reviews some recent projects on reshaping the workings of ECOFIN relative to coordination policy, target zones and interest rate policy. Section 3 assesses the ECB monetary policy in the perspective of strategic interaction perspective.
1999
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/2236/1/002648_1.pdf
Campanella, Miriam L. (1999) “ECOFIN-11 and the European Central Bank: A Rational Choice Perspective”. In: UNSPECIFIED, Pittsburgh, Pennsylvania. (Unpublished)
http://aei.pitt.edu/2236/
oai:aei.pitt.edu:2299
2011-02-15T22:22:09Z
7374617475733D756E707562
7375626A656374733D46:46303036
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D636F6E666572656E63655F6974656D
“French Aversion to Independent Monetary Authority and the Development of French Policy on the EMU Project”
Howarth, David.
monetary policy
France
EMU/EMS/euro
The Jospin Government’s demands to create a stronger political control over European monetary policy reflect a deeper concern in French political and administrative circles of the problematic political and economic nature of central bank independence. French opposition to central bank independence is rooted in four factors: the republican tradition; the perception of the appropriate link between monetary and economic policy; the belief that low inflationary policies do not require independent central banks; and the institutional power concerns of the French Treasury. This opposition shaped French positions on the details of the EMU project, the intergovernmental negotiations and their outcome. An appreciation of this opposition is thus necessary to understand the nature of French motives and the process leading to EMU. It also demonstrates the strengths and weaknesses of the leading explanations for French support for EMU and, more generally, the process leading to monetary integration.
1999
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/2299/1/002337_1.PDF
Howarth, David. (1999) “French Aversion to Independent Monetary Authority and the Development of French Policy on the EMU Project”. In: UNSPECIFIED, Pittsburgh, PA. (Unpublished)
http://aei.pitt.edu/2299/
oai:aei.pitt.edu:2414
2011-02-15T22:22:40Z
7374617475733D756E707562
7375626A656374733D44:44303031:706F6C69746963616C6166666169727331323334:7061666664656D6F637261637964656D6F63726174696364656669636974
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D636F6E666572656E63655F6974656D
“Policies, Institutions and the Euro: Dilemmas of Legitimacy and Democratic Control”
Verdun, Amy.
Christiansen, Thomas.
democracy/democratic deficit
monetary policy
EMU/EMS/euro
Accepting the underlying political nature of the monetary union project, this paper seeks to question the foundations of its legitimacy, and investigate the problems connected with democratic control under an EMU regime. In doing so, we suggest that current and future problems of legitimation of the single currency can be explained as follows. On the one hand, EMU rests on the creation of a set of powerful institutions with direct and executive authority in an area of policy-making, i.e. monetary policy, which is generally regarded as elementary to the governance of modern economy and society. On the other hand, the establishment of important and autonomous institutions at the European level precedes the emergence of a political community in which such decisions, or, more significantly, the procedures for the taking of such decisions, can be grounded. Indeed, as remarked at the outset, EMU is specifically designed to contribute to the emergence of such a polity.
1999
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/2414/1/002894_1.PDF
Verdun, Amy. and Christiansen, Thomas. (1999) “Policies, Institutions and the Euro: Dilemmas of Legitimacy and Democratic Control”. In: UNSPECIFIED, Pittsburgh, PA. (Unpublished)
http://aei.pitt.edu/2414/
oai:aei.pitt.edu:2534
2011-02-15T22:22:48Z
7374617475733D756E707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D636F6E666572656E63655F6974656D
"Monetary policy coordination, credibility and structural asymmetries"
Bednar, N.
Monfort, Philippe.
monetary policy
EMU/EMS/euro
The aim of this paper is to discuss the issue of monetary policy coordination in a framework where partners differ not because of idiosyncratic shocks but because of structural asymmetries affecting the conduct of national economic policies. These are introduced at the level of the country size or equivalently at the level of factor productivity. The main result of the paper is that, if coordination of the monetary policy proves to be welfare improving, the gains from cooperation reduce with the size of the economy. We then show that the chances of finding a mutually beneficial coordination arrangement may be higher if countries are not too different in size (or in factor productivity). In this perspective, the coordination of national monetary policies which will take place under EMU between countries presenting large structural differences might be a source of tension among the partners for which the adoption of simple convergence rules or of insurance schemes constitutes no remedy.
1997
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/2534/1/002871_1.PDF
Bednar, N. and Monfort, Philippe. (1997) "Monetary policy coordination, credibility and structural asymmetries". In: UNSPECIFIED, Seattle, WA. (Unpublished)
http://aei.pitt.edu/2534/
oai:aei.pitt.edu:2710
2011-02-15T22:23:40Z
7374617475733D756E707562
7375626A656374733D44:44303031:44303031303337
7375626A656374733D44:44303035:69646F7067:69646F7067646D706D
7375626A656374733D44:44303035:44303035303130
7375626A656374733D44:44303031:4430303170707061
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303031:6D656469616D65646961
74797065733D636F6E666572656E63655F6974656D
"Policy transfer in the European Union: Institutional isomorphism as a source of legitimacy"
Radaelli, Claudio.
media
tax policy
public policy/public administration
monetary policy
European Commission
decision making/policy-making
The paper examines public policy in the European Union (EU) by drawing upon the conceptual framework of policy transfer, which has been recently examined by comparativists, and the concept of isomorphism developed within organisational theory. Three case studies of ‘supra-national’ policy transfer--namely monetary policy, tax policy, and media ownership policy--are discussed and compared for assessing the potential of isomorphism for the analysis of policy diffusion. The author argues that European institutions, which have a serious political limitation in terms of legitimacy, stimulate policy transfer by catalysing isomorphic processes which diffuse throughout the EU national policy solutions to collective problems. By contrast, policy transfer is severely constrained when there are no national cases to be imitated. In this circumstance, however, European institutions, most notably the European Commission, can overcome the problem by ‘inseminating’ solutions into national political systems.
1997
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/2710/1/002748.PDF
Radaelli, Claudio. (1997) "Policy transfer in the European Union: Institutional isomorphism as a source of legitimacy". In: UNSPECIFIED, Seattle, WA. (Unpublished)
http://aei.pitt.edu/2710/
oai:aei.pitt.edu:3410
2011-02-15T22:26:52Z
7374617475733D707562
7375626A656374733D46:46303331
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666167656E6572616C
7375626A656374733D46:46303239
7375626A656374733D46:46303330
7375626A656374733D46:46303133
7375626A656374733D46:46303137
7375626A656374733D46:46303034
7375626A656374733D46:46303231
7375626A656374733D46:46303039
7375626A656374733D46:46303132
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D46:46303232
74797065733D776F726B696E677061706572
Asymmetric Growth and Inflation Developments in the Acceding Countries: A New Assessment. NBB Working Paper Nr. 63, November 2004
Ide, Stefaan
Moes, Philippe.
monetary policy
Latvia
Estonia
Slovak Republic
Lithuania
Slovenia
Czech Republic
Cyprus
general
Malta
Poland
Hungary
In this paper, we use a SVAR model in order to study the asymmetry of growth and inflation developments in the acceding countries vis-à-vis the euro area over the years 1995-2003. The model combines two strands of the literature, the explanation in terms of country-specific and euro area shocks, and a further split between supply and demand shocks. The four structural shocks may all create asymmetries vis-à-vis the euro area. It appears that country-specific shocks are the main source of growth or inflation divergence, rather than the distinct way in which acceding countries react to euro area shocks. But whereas country-specific supply shocks are mainly responsible for growth divergence, country-specific demand shocks are mainly responsible for inflation asymmetry. Hence, a low asymmetry in terms of growth does not necessarily imply a low asymmetry in terms of inflation, although the latter is particularly important for countries aiming to join the euro area. There is some evidence that both asymmetries were on the fall over the last years of the sample.
2004-11
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/3410/1/WP63En.pdf
Ide, Stefaan and Moes, Philippe. (2004) Asymmetric Growth and Inflation Developments in the Acceding Countries: A New Assessment. NBB Working Paper Nr. 63, November 2004. [Working Paper]
http://aei.pitt.edu/3410/
oai:aei.pitt.edu:5737
2011-02-15T22:38:23Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
Measuring inflation persistence: a structural time series approach. NBB Working Paper Nr.70, June 2005
Dossche, Maarten
Everaert, Gerdie.
monetary policy
EMU/EMS/euro
Time series estimates of inflation persistence incur an upward bias if shifts in the inflation target of the central bank remain unaccounted for. Using a structural time series approach we measure different sorts of inflation persistence allowing for an unobserved timevarying inflation target. Unobserved components are identified using Kalman filtering and smoothing techniques. Posterior densities of the model parameters and the unobserved components are obtained in a Bayesian framework based on importance sampling. We find that inflation persistence, expressed by the halflife of a shock, can range from 1 quarter in case of a costpush shock to several years for a shock to longrun inflation expectations or the output gap.
2005-06
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/5737/1/wp70En.pdf
Dossche, Maarten and Everaert, Gerdie. (2005) Measuring inflation persistence: a structural time series approach. NBB Working Paper Nr.70, June 2005. [Working Paper]
http://aei.pitt.edu/5737/
oai:aei.pitt.edu:6486
2011-02-15T22:42:46Z
7374617475733D756E707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303035:44303035303039
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D636F6E666572656E63655F6974656D
"Adjusting to EMU: The impact of monetary union on domestic fiscal and wage-setting institutions"
Enderlein, Henrik.
monetary policy
fiscal policy
European Central Bank
EMU/EMS/euro
This paper argues that when EU member states joined EMU, this resulted in domestic institutional changes in the areas of fiscal policy-making and wage-setting. The paper argues that these changes were triggered by two facts: (i) in EMU, the monetary policy can no longer be used as an instrument for output stabilization; (ii) the "one size fits all" monetary policy of the ECB potentially destabilizes output in those countries whose economic data diverge from the euro area average. Assuming that EMU member states will seek to use fiscal policy or wage-setting in order to re-stabilize output, the theoretical part of the paper investigates the economic and political contexts in which these two instruments can be used as stabilizing instruments and specifies the institutional pre-conditions for successful stabilization. The paper then extrapolates potential problem-pressures resulting from the ECB monetary policy for each country and investigates whether the appropriate set of institutions to deal with this pressure had existed before EMU or whether institutional change could be expected as a reaction to it. In a comparative part, institutional changes that have taken place in ten member states since the start of EMU are assessed and compared to the theoretical expectations. The paper concludes that the asymmetric pattern of institutional adjustment in fiscal policy institutions and wage-setting institutions closely follows the approach presented in the theoretical part of the paper.
2003
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/6486/1/000428_1.PDF
Enderlein, Henrik. (2003) "Adjusting to EMU: The impact of monetary union on domestic fiscal and wage-setting institutions". In: UNSPECIFIED, Nashville, TN. (Unpublished)
http://aei.pitt.edu/6486/
oai:aei.pitt.edu:6581
2011-02-15T22:43:19Z
7374617475733D707562
7375626A656374733D44:44303035:44303035303130
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153746162696C69747947726F77746850616374
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D706F6C6963797061706572
The Dog that Lost Its Bark: The Commission and the Stability Pact. CEPS Policy Briefs No. 58, 1 November 2004
Gros, Daniel
Mayer, Thomas
Ubide, Angel.
European Commission
Stability and Growth Pact
monetary policy
In a new Policy Brief submitted this month to the Monetary Committee of the European Parliament, CEPS Director Daniel Gros and two of his fellow Macroeconomic Policy Group members find that the case for consolidation of government finances against the background of present and prospective demographic changes remains very strong. They argue that the Commission’s recent proposals for reform of the SGP risk watering down the Pact, resulting in an erosion of fiscal discipline.
2004-11
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/6581/1/1178_58.pdf
Gros, Daniel and Mayer, Thomas and Ubide, Angel. (2004) The Dog that Lost Its Bark: The Commission and the Stability Pact. CEPS Policy Briefs No. 58, 1 November 2004. [Policy Paper]
http://aei.pitt.edu/6581/
oai:aei.pitt.edu:6636
2012-04-06T16:00:42Z
7374617475733D707562
7375626A656374733D46:46303133
7375626A656374733D44:44303032:44303032303231
7375626A656374733D46:46303034
7375626A656374733D46:46303132
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
Are the Balance of Payments Deficits in the Baltic Countries Sustainable?. CEPS Working Documents No. 207, 1 July 2004
Drud Hansen, Jorgen
Hansen, Morten
monetary policy
Latvia
Estonia
Lithuania
EU-Baltics
For almost a decade all three Baltic countries have witnessed substantial deficits on the current accounts of the balance of payments. This paper discusses whether this situation should be a matter of concern. Recent literature on the sustainability of balance of payments deficits is reviewed and put into a Baltic context. The main conclusion is that the recurrent large deficits in the Baltic countries pose a risk for the fixed exchange-rate policies until the countries adopt the euro. In the longer term, large deficits will influence the time path of convergence of living standards between the Baltic countries and the EU as a whole.
2004-07
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/6636/1/Drud_hansen_July_2004.pdf
Drud Hansen, Jorgen and Hansen, Morten (2004) Are the Balance of Payments Deficits in the Baltic Countries Sustainable?. CEPS Working Documents No. 207, 1 July 2004. [Working Paper]
http://aei.pitt.edu/6636/
oai:aei.pitt.edu:6766
2011-02-15T22:44:23Z
7374617475733D707562
7375626A656374733D46:46303332
7375626A656374733D44:44303033:44303033303032
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
Financial Aspects of Central Bank Independence and Price Stability – The Case of Turkey. CEPS EU-Turkey Working Papers No. 12, 1 September 2004
Gros, Daniel.
enlargement
Turkey
monetary policy
Turkey presents a fascinating case study on the potential fiscal consequences of price stability against a background characterised by a combination of recent central bank independence, a difficult path towards price stability, a high degree of dollarisation and a central bank balance sheet burdened with items that have little to do with monetary policy. A number of national central banks (NCBs) in Europe faced similar problems prior to joining EMU (and some of the new EU member countries’ NCBs also face similar problems now), but in Turkey all these issues combine in a mixture that is unique and may lead to serious problems. Taking the implications of dollarisation into account in the measurement of seigniorage leads one back to the fundamental issue of how to judge monetary policy in a country where the national central bank controls only the money supply in national currency.
2004-09
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/6766/1/1158_12.pdf
Gros, Daniel. (2004) Financial Aspects of Central Bank Independence and Price Stability – The Case of Turkey. CEPS EU-Turkey Working Papers No. 12, 1 September 2004. [Working Paper]
http://aei.pitt.edu/6766/
oai:aei.pitt.edu:6899
2016-01-30T18:06:23Z
7374617475733D756E707562
7375626A656374733D44:44303032:44303032303039
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D636F6E666572656E63655F6974656D
"Should the European Tier Play a Role in Prudential Supervision of Banks?"
Begg, Iann
Green, David.
EU-US
monetary policy
Although the Treaty on European Union is, in many respects, an ambitious blueprint for European integration, it has little to say about a number of areas of public policy. In some of these areas, no clear guidance is given about whether responsibility for policy should remain with Member States or be re-assigned to the supranational tier. By contrast, the assignment of competences is entirely explicit in other fields. Thus, monetary union will see the transfer of responsibility for monetary policy from Member States to the European Central Bank (ECB), while fiscal policy will remain with Member States. The ECB, acting together with national Central Banks in what will be known as the European System of Central Banks (ESCB), will also have related responsibilities for assuring the viability of the European financial system. Yet even here there is ambiguity about where responsibilities will lie for different functions. Prudential supervision of banks - controls designed to assure the capital adequacy and liquidity of banks - is a good illustration of this. Thus, article 105 (5) of the Treaty states that the ESCB 'shall contribute to ... prudential supervision of credit institutions and the stability of the financial system' and in 105 (6) there is reference to the possibility that the ECB may be asked to undertake specific tasks in relation to 'prudential supervision of credit institutions and other financial institutions with the exception of insurance undertakings'. In the transition to EMU, the European Monetary Institute (EMI), which is the precursor to the ECB, is given the right to hold consultations on 'issues falling within the competence of the national central banks and affecting the stability of financial institutions and markets' (article 109f). This paper first reviews the case for supervision of banks and other credit institutions. The following section outlines a series of new problems for prudential supervisors and reviews recent relevant experience in the United States and elsewhere. The discussion then turns to an assessment of the arguments surrounding the extent of the involvement that an EU tier of government should have in this arena. Finally, a number of conclusions and proposals are presented.
1995
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/6899/1/begg_iain.pdf
Begg, Iann and Green, David. (1995) "Should the European Tier Play a Role in Prudential Supervision of Banks?". In: UNSPECIFIED, Charleston, South Carolina. (Unpublished)
http://aei.pitt.edu/6899/
oai:aei.pitt.edu:7137
2011-02-15T22:46:33Z
7374617475733D756E707562
7375626A656374733D46:46303037
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:44303031303138:656C6D696E647573747269616C6C61626F757272656C6174696F6E73
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666165636F6E6F6D6963706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
7375626A656374733D44:44303031:44303031303234
74797065733D636F6E666572656E63655F6974656D
"The Effect of European Integration on National Industrial Relations Systems: The Ambiguous Case of Germany"
Sadowski, Dieter.
monetary policy
fiscal policy
industrial policy
economic policy
Germany
industrial/labour relations
EMU/EMS/euro
[From the Introduction]. What impact has the supranational European regulation and the politically induced and controlled integration of product, capital and labour markets exercised on the German industrial relations systems to date? While the effects of EC social and labour law and the jurisdiction of the European Court of Justice can easily be identified - leaving open the question of whether reality complies with the norms - the consequences of EC polity and policy changes are much harder to trace....Many of the questions raised will only receive a tentative, speculative answer. To inform the discussion I will successively address: firstly, the explicit supranational regulations of labour market institutions; secondly, the indirect intervention into labour markets via monetary and fiscal policies and via industrial policies. Finally, the consequences of German unification and German monetary union are given special attention to separate German from European developments and to allow cautious speculations about the consequences of a European Monetary Union as stipulated in the Maastricht Treaty.
1993
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/7137/1/002371_1.PDF
Sadowski, Dieter. (1993) "The Effect of European Integration on National Industrial Relations Systems: The Ambiguous Case of Germany". In: UNSPECIFIED, Washington, CD. (Unpublished)
http://aei.pitt.edu/7137/
oai:aei.pitt.edu:7395
2012-04-06T17:07:04Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
Financial Structure and its Impact on the Convergence of Interest Rate Pass-through in Europe: A Time-varying Interest Rate Pass-through Model. ENEPRI Working Paper, No. 51, 7 February 2007
Schwarzbauer, Wolfgang.
monetary policy
So far studies concerned with the interest pass-through of monetary policy have not taken into account one central issue that arose in Europe in the late 1990s: the importance of financial structure for the convergence of monetary transmission. This study addresses this shortcoming. We estimate a time varying interest pass-through allowing us to test for the importance of financial structure and its impact on the convergence of the effects of monetary policy. We find convergence in banks' reaction to money market movements, which is additionally reduced in groups of countries with similar financial structure. Furthermore, there is a significant impact of financial structure on the extent of transmission of monetary policy impulses within the same month. Thus, differences in financial structure between countries must not be ignored when considering convergence of monetary transmission in Europe.
2007-02
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/7395/2/7395.pdf
Schwarzbauer, Wolfgang. (2007) Financial Structure and its Impact on the Convergence of Interest Rate Pass-through in Europe: A Time-varying Interest Rate Pass-through Model. ENEPRI Working Paper, No. 51, 7 February 2007. [Working Paper]
http://aei.pitt.edu/7395/
oai:aei.pitt.edu:7463
2016-01-30T18:03:12Z
7374617475733D756E707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303032:44303032696E7465726E6174696F6E616C65636F6E6F6D79
7375626A656374733D44:44303035:69646F7067:69646F706768646F63
7375626A656374733D46:46303236
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D636F6E666572656E63655F6974656D
"Hegemony without Motivation: Domestic Policy Priorities and the Management of Exchange Rate Stabilization"
Barkin, Samuel.
U.K.
international economy
monetary policy
EMU/EMS/euro
historical development of EC (pre-1986)
This article will first develop the concept of financial motivations, presenting first the relevant variables and then the logic suggesting why they should be linked. Then it will look at monetary policy behaviour in four international monetary systems; the gold standard at the beginning of this century, the gold exchange standard of the interwar period, the Bretton Woods system in the 1960s, and the European Exchange Rate Mechanism of the past decade. In each case, the behaviour of the core state in the monetary system will be examined, except in the interwar system, for which both British and American policy will be addressed, as both countries were crucial to the system. This set of cases represents the universe of major functioning market-driven exchange rate systems this century. The case studies will trace the relationship between financial motivation and monetary policy in these core countries. Finally, the conclusion will suggest some implications of these findings for the construction of new systems for exchange rate stabilization.
1995
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/7463/1/31735055277614.pdf
Barkin, Samuel. (1995) "Hegemony without Motivation: Domestic Policy Priorities and the Management of Exchange Rate Stabilization". In: UNSPECIFIED, Charleston, South Carolina. (Unpublished)
http://aei.pitt.edu/7463/
oai:aei.pitt.edu:7545
2011-02-15T22:48:47Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666167656E6572616C
7375626A656374733D46:46303239
7375626A656374733D44:44303033:44303033303032
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65636F6E6F6D696366696E616E6369616C6166666169727362706561
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D61727469636C65
"The Influence of the Development of Reference Interest Rates in Choosing Investment and Debt Financial Tools for Corporations - Case of the Czech Republic in 1997-2002s"
Polák, Petr.
monetary policy
Czech Republic
enlargement
general
business/private economic activity
This paper focuses on the development of reference interest rates in the Czech Republic after the currency crisis of May 1997 and covers the period to the years 2002/2003 (that is to the time just before the country’s entry into the European Union) when the currency exchange of the Czech koruna (CZK) and interest rates were stabilised. The relatively high volatility of Czech reference interest rates in the late 1990’s influenced the development of company debt financing, forcing companies to become more sophisticated and dynamic in their use of debt instruments and hedging tools as they attempt to manage the subsequent interest rate risk. In this paper, the situation in three model corporations is also described – the first, a solvent company with a foreign owner (Moravian-Silesian Heating Company – MSHC, renamed to Dalkia Morava in 2002), the second, a solvent company with the Czech state as its majority owner (North Moravian Power Company – NMPC), and the third with domestic capital, which had economic problems during the given period (Vítkovice, a.s.), plus a big insurance company as a specific and very important institutional investor in domestic financial markets.
2007
Article
NonPeerReviewed
application/pdf
http://aei.pitt.edu/7545/1/Polak.pdf
Polák, Petr. (2007) "The Influence of the Development of Reference Interest Rates in Choosing Investment and Debt Financial Tools for Corporations - Case of the Czech Republic in 1997-2002s". Journal of Emerging Markets, 12 (2). p. 15.
http://aei.pitt.edu/7545/
oai:aei.pitt.edu:7546
2011-02-15T22:48:47Z
7374617475733D707562
7375626A656374733D46:46303239
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65636F6E6F6D696366696E616E6369616C6166666169727362706561
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153696E676C654D61726B6574:65666153696E676C654D61726B65746361706974616C676F6F64737365727669636573
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D61727469636C65
"Cash and Working Capital Management in the Czech Republic"
Polák, Petr.
capital, goods, services, workers
monetary policy
Czech Republic
business/private economic activity
This paper outlines the changing financial scene in The Czech Republic, which is following the global pattern of institutional investors taking over the role of commercial banks as relationship banking is gradually giving way to transaction-driven banking. Investment-grade companies have become more reliant on direct financing and less reliant on intermediated financing. This is due both to reluctance by banks to extend credit facilities to high-grade corporates as they search for more lucrative returns on capital, and by the growth in the supply of capital by institutional and other non-bank investors. This growth in direct financing has been predominately in the form of unsecured and unregistered commercial paper issues. The relatively high Czech reference interest rates in the late 1990’s influenced the development of company debt financing, forcing companies to become more sophisticated and dynamic in their use of debt instruments and hedging tools as they attempt to manage the subsequent interest rate risk. The objectives of cash management are straightforward – maximise liquidity and control cash flows and maximise the value of funds while minimising the cost of funds. The strategies for meeting such objectives include varying degrees of long-term planning requirements. Also, like everywhere in the world, much treasury activity in the Czech Republic is concentrated on cash management. This includes financing the corporation, administration of debts (loans, bonds, commercial papers, etc.), good relationships with the banks, payments to suppliers and collections from customers, control of foreign currency and interest positions according to the company’s needs for finance, and finally the reporting and technical support of all these functions. The use of cash pooling as a global standard for concentrating cash into the main bank account of the firm, has very quickly found favour in corporates in the Czech Republic.
2007
Article
NonPeerReviewed
application/pdf
http://aei.pitt.edu/7546/1/IMFI_Polak.pdf
Polák, Petr. (2007) "Cash and Working Capital Management in the Czech Republic". Investment Management and Financial Innovations, 4 (1). p. 17.
http://aei.pitt.edu/7546/
oai:aei.pitt.edu:7608
2011-02-15T22:49:08Z
7374617475733D707562
7375626A656374733D44:44303031:44303031303335:737077656C666172657374617465
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D46:46303135
74797065733D776F726B696E677061706572
"Simulation, estimation and welfare implications of monetary policies in a 3-country NOEM model." NBB Working Paper No. 94, October 2006
Plasmans, Joseph,
Michalak, Tomasz,
Fornero, Jorge.
monetary policy
welfare state
Netherlands
In this paper we derive a microfounded macro New Keynesian model for open economies, be them large or small. We consider habit formation in consumption, sectoral linkages, domestic and foreign governments, tradable and non-tradable final and intermediate goods and imperfect pass-through in these sectors. Sticky nominal prices and wages are modeled in a Calvo way. The model economy is composed of a continuum of infinitely-lived consumers and producers for three regions (countries). Numerical simulations and econometric estimations are presented with a focus on a small open economy member of the EMU. Welfare implications of the involved price and wage rigidities are discussed.
2006-10
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/7608/1/wp94En.pdf
Plasmans, Joseph, and Michalak, Tomasz, and Fornero, Jorge. (2006) "Simulation, estimation and welfare implications of monetary policies in a 3-country NOEM model." NBB Working Paper No. 94, October 2006. [Working Paper]
http://aei.pitt.edu/7608/
oai:aei.pitt.edu:7609
2011-02-15T22:49:08Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
"Inflation persistence and price-setting behaviour in the euro area: a summary of the Inflation Persistence Network evidence." NBB Working Paper No. 95, October 2006
Altissimo, Filippo,
Ehrmann, Michael,
Smets, Frank.
monetary policy
EMU/EMS/euro
This paper provides a summary of current knowledge on inflation persistence and price stickiness in the euro area, based on research findings that have been produced in the context of the Inflation Persistence Network. The main findings are: i) Under the current monetary policy regime, the estimated degree of inflation persistence in the euro area is moderate; ii) Retail prices in the euro area are more sticky than in the US; iii) There is significant sectoral heterogeneity in the degree of price stickiness; iv) Price decreases are not uncommon. The paper also investigates some of the policy implications of these findings.
2006-10
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/7609/1/wp95En.pdf
Altissimo, Filippo, and Ehrmann, Michael, and Smets, Frank. (2006) "Inflation persistence and price-setting behaviour in the euro area: a summary of the Inflation Persistence Network evidence." NBB Working Paper No. 95, October 2006. [Working Paper]
http://aei.pitt.edu/7609/
oai:aei.pitt.edu:7611
2011-02-15T22:49:09Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
"Assessing the Gap between Observed and Perceived Inflation in the Euro Area: Is the Credibility of the HICP at Stake?" NBB Working Paper No. 112, April 2007
Aucremanne, Luc,
Collin, Marianne,
Stragier, Thomas.
monetary policy
EMU/EMS/euro
We find strong econometric support for a break in the relationship between perceived and HICP inflation in the euro area, triggered by the introduction of euro notes and coins in January 2002. The break is fairly homogeneous across individuals with different socio-economic characteristics. We found no support for the thesis according to which perceptions are systematically formed by frequently purchased products. A similar break is found when national CPIs instead of HICPs are used as benchmarks. The role of the non-inclusion of owner-occupied housing in the HICP was negligible. Therefore the credibility of the HICP per se is not at stake.
2007-04
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/7611/1/wp112En.pdf
Aucremanne, Luc, and Collin, Marianne, and Stragier, Thomas. (2007) "Assessing the Gap between Observed and Perceived Inflation in the Euro Area: Is the Credibility of the HICP at Stake?" NBB Working Paper No. 112, April 2007. [Working Paper]
http://aei.pitt.edu/7611/
oai:aei.pitt.edu:7612
2011-02-15T22:49:09Z
7374617475733D707562
7375626A656374733D44:44303031:44303031303432
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
"The performance of credit rating systems in the assessment of collateral used in Eurosystem monetary policy operations." NBB Working Paper No. 118, September 2007
Coppens, François,
González, Fernando,
Winkler, Gerhard.
consumer protection policy
monetary policy
The aims of this paper are twofold: first, we attempt to express the threshold of a single “A” rating as issued by major international rating agencies in terms of annualised probabilities of default. We use data from Standard & Poor’s and Moody’s publicly available rating histories to construct confidence intervals for the level of probability of default to be associated with the single “A” rating. The focus on the single A rating level is not accidental, as this is the credit quality level at which the Eurosystem considers financial assets to be eligible collateral for its monetary policy operations. The second aim is to review various existing validation models for the probability of default which enable the analyst to check the ability of credit assessment systems to forecast future default events. Within this context the paper proposes a simple mechanism for the comparison of the performance of major rating agencies and that of other credit assessment systems, such as the internal ratings-based systems of commercial banks under the Basel II regime. This is done to provide a simple validation yardstick to help in the monitoring of the performance of the different credit assessment systems participating in the assessment of eligible collateral underlying Eurosystem monetary policy operations. Contrary to the widely used confidence interval approach, our proposal, based on an interpretation of p-values as frequencies, guarantees a convergence to an ex ante fixed probability of default (PD) value. Given the general characteristics of the problem considered, we consider this simple mechanism to also be applicable in other contexts.
2007-09
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/7612/1/wp118En.pdf
Coppens, François, and González, Fernando, and Winkler, Gerhard. (2007) "The performance of credit rating systems in the assessment of collateral used in Eurosystem monetary policy operations." NBB Working Paper No. 118, September 2007. [Working Paper]
http://aei.pitt.edu/7612/
oai:aei.pitt.edu:7788
2011-02-15T22:50:08Z
7374617475733D756E707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666167656E6572616C
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303035:44303035303039
74797065733D636F6E666572656E63655F6974656D
Analysis and visualization of synchronicity in European business and growth cycles and the implications for ECB monetary policy
Crowley, Patrick M.
European Central Bank
monetary policy
general
[From the introduction]. The synchronicity of cycles in real output is a subject that has attracted increased attention in the eld of economics, largely because not only is the international synchronicity of turning points of business cycles a "stylized fact", but also because within a monetary union, given the absence of labor mobility and federal transfers, synchronicity of growth cycles is an important pre-requisite for optimal application of a single monetary policy. Given the fact that business cycles are largely the only cycle that economists recognize in national income data, it is perhaps natural to study the synchronicity of these cycles, and yet for monetary policy the dynamic of GDP growth at other frequencies is also important. Given that monetary policy usually operates at roughly a monthly level, the dynamic of GDP at even quarterly levels has implications for the implementation of monetary policy across different countries or jurisdictions. As the optimal currency area literature suggests that synchronization of business and growth cycles is an important consideration for adoption of a single currency, monetary policy is more easily formulated if these cycles in real GDP growth are similar between the member states that have qualified and subsequently adopted the euro. In this paper the synchronicity of business and growth cycles is first assessed assessed, both statically and dynamically, and then the paper goes on to look at the potential problems that these findings might raise for a single monetary policy in the euro area in the future. In the quantitative part of this paper, a new approach is taken to assessing synchronicity in real GDP growth, that of using a variation on recurrence plots and recurrence quantification analysis (RQA). RQA has its origins in physics, but is now used in many disciplines such as climatology, physiology, biology, chemistry, acoustics and astronomy. This technique is particularly suited to analysis of nonlinear dynamical systems, and so is likely better suited to analysis of business and growth cycles in real GDP than are linear econometric-based time series methods.
2007
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/7788/1/crowley%2Dp%2D04e.pdf
Crowley, Patrick M. (2007) Analysis and visualization of synchronicity in European business and growth cycles and the implications for ECB monetary policy. In: UNSPECIFIED, Montreal, Canada. (Unpublished)
http://aei.pitt.edu/7788/
oai:aei.pitt.edu:7905
2011-02-15T22:50:53Z
7374617475733D756E707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D46:46303234
7375626A656374733D46:46303033
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303031:706F6C69746963616C6166666169727331323334:706166664575726F7065616E656C656374696F6E73
74797065733D636F6E666572656E63655F6974656D
"Is My Crown Better than Your Euro? Exchange Rates and Public Opinion on the European Single Currency"
Hobolt, Sara Binzer
Leblond, Patrick.
Denmark
European elections/voting behavior
Sweden
monetary policy
EMU/EMS/euro
The No to the euro in referendums in Denmark and Sweden has been characterized as a public rebellion against an elite project and a sign of a general Euroscepticism among the citizens. However, it is often ignored that support for the euro fluctuates significantly over time in these countries, and hence analysing referendum outcomes simply in terms on static factors will provide only part of the explanation. In contrast to existing studies, this paper provides an analysis of the short-term dynamics in public support for the euro in the period leading up to the referendums. We thus address the question of why public attitudes towards monetary integration vary over time. We argue that at least part of the answer can be found in exchange rate fluctuations. Existing studies have neglected the fact that the national currency is not only a purely monetary indicator, but also carries symbolic weight. The public is therefore less likely to surrender their national currency when it is strong than when it is weak. They are also less willing to accept a replacement currency (e.g. the euro) when it is seen as weak vis-à-vis other world currencies. Our analysis of the two euro campaigns lends credence to our proposition that exchange rates matter. Moreover, we test impact of exchange rate changes on support of the euro using time series analysis. We find that the rapid fall in the value of the euro vis-à-vis the dollar contributed to the Danish rejection of the euro, whereas the strength of the Swedish currency made the Swedes more reluctant to relinquish their crown.
2007
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/7905/1/hobolt%2Ds%2D04e.pdf
Hobolt, Sara Binzer and Leblond, Patrick. (2007) "Is My Crown Better than Your Euro? Exchange Rates and Public Opinion on the European Single Currency". In: UNSPECIFIED, Montreal, Canada. (Unpublished)
http://aei.pitt.edu/7905/
oai:aei.pitt.edu:7956
2011-02-15T22:51:13Z
7374617475733D756E707562
7375626A656374733D44:44303031:627564676574706F6C696379
7375626A656374733D44:44303035:44303035303130
7375626A656374733D44:44303035:69646F7067:69646F706768646F63
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666165636F6E6F6D6963706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303031:44303031303330
74797065733D636F6E666572656E63655F6974656D
"Macroeconomic governance in the European Union: Did we learn the lessons from the past?
Maes, Ivo.
regional policy/structural funds
monetary policy
economic policy
European Commission
historical development of EC (pre-1986)
budgets & financing
Since the Rome Treaties, the question of the organisation of macroeconomic and monetary policy has been a key issue in the debates on European integration. In this paper we explore the continuity and changes in these debates. We focus on macroeconomic thought at the European Commission in two periods: the 1960s and early 2000. There are important changes, especially in the areas of monetary policy and structural policies. In the early period, exchange rate disturbances (like after May 1968 in France), constituted an important threat to the European project. With the realisation of monetary union and a stability-oriented monetary policy, monetary disturbances and threats have largely disappeared. So, according to the Commission analysis, there has been substantial progress in this area. With respect to structural policy, one can observe profound changes in the underlying economic policy paradigms. While state intervention was high on the agenda in the 1960s, now a more market conform approach is advocated, which is also prominent in the Lisbon strategy. There is also a change in methodology: from "programming" to the "open method of coordination", even if both are set in a medium-term framework. However, looking at the coordination of budgetary policy, the issue is much more complicated. With the Maastricht Treaty and the Stability and Growth Pact, the European Union made a choice for a rules based fiscal framework. However, as is well known, there have been problems in this area. In fact, there are some remarkable continuities here with the 1960s. Several issues, which were prominent on the Commission agenda then (like, how to have influence on Member State policies, statistical governance, the construction of early warning indicators) are still there today. Consequently, the Commission is now, very much in line with a political economy approach, seeking to increase the national "ownership" of the budgetary and reform policies which it advocates.
2007
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/7956/1/maes%2Di%2D07d.pdf
Maes, Ivo. (2007) "Macroeconomic governance in the European Union: Did we learn the lessons from the past? In: UNSPECIFIED, Montreal, Canada. (Unpublished)
http://aei.pitt.edu/7956/
oai:aei.pitt.edu:7966
2011-02-15T22:51:17Z
7374617475733D756E707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D41:41303239
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566617472616465706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D636F6E666572656E63655F6974656D
Why so much wage restraint in EMU? The role of country size: Integrating trade theory with monetary policy regime accounts
Marzinotto, Benedicta.
integration theory (see also researching and writing the EU in this section)
monetary policy
EMU/EMS/euro
trade policy
Wage growth has remained under control after the formation of the European Monetary Union (EMU). The literature has advanced numerous explanations to account for this phenomenon. But, arguments about the need to preserve competitiveness in an enlarged market remain too generic. At the same time, analyses that focus on the alleged deterioration of labour market institutions (e.g. de-unionization, decentralization, etc.) find little empirical support. More promising are the results obtained by Posen and Gould (2006) indicating that behind the generalised shift towards wage restraint is enhanced monetary credibility in EMU. This paper builds on the school in comparative political economy that models the interaction between wage bargaining systems and the monetary policy regime but integrates it with more traditional trade theories. The argument developed here is that the degree in wage restraint varies according to country size. The relationship between wage growth and economy size is hump-shaped. Wage compression is especially present in large countries (e.g. Germany) that entertain intense trade relations with the rest of the eurozone. This is because wage-setters in large countries fear that they might affect average price conditions in the euroarea forcing a reaction by the ECB, which is highly undesirable as it would dampen not only domestic demand but also demand conditions in the rest of EMU with employment costs spread across the board from more protected to export-oriented sectors. Downwards pressures on wages are less pronounced in small countries. In spite of the fact that small open economies perceive cost competitiveness as a key driver of their economic growth, wage-setters in small countries can nonetheless act as free-riders in the new EMU monetary regime. Finally, countries of intermediate size display slightly faster wage growth than in the rest of EMU because neither do they believe capable of affecting eurozone inflation, nor do they look at the improvement in cost competitiveness as the one and only chance for their economic survival.
2007
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/7966/1/marzinotto%2Db%2D04d.pdf
Marzinotto, Benedicta. (2007) Why so much wage restraint in EMU? The role of country size: Integrating trade theory with monetary policy regime accounts. In: UNSPECIFIED, Montreal, Canada. (Unpublished)
http://aei.pitt.edu/7966/
oai:aei.pitt.edu:8041
2011-02-15T22:51:43Z
7374617475733D756E707562
7375626A656374733D46:46303238
7375626A656374733D46:46303039
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153696E676C654D61726B6574:65666153696E676C654D61726B65746361706974616C676F6F64737365727669636573
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D636F6E666572656E63655F6974656D
"When Does the Law Rule? The Politics of Banking Sector Legal Reform in the Post-Communist Region after 1989"
Spendzharova, Aneta B.
capital, goods, services, workers
monetary policy
Bulgaria
Hungary
[From the introduction]. My dissertation contributes to two lively debates in comparative politics today: What factors have led to the divergent liberal and illiberal trajectories of reform in transitional countries, and how have international actors influenced legal reform in the region � for better or for worse? We still need to deepen our knowledge of the processes that promote the adoption and implementation of good quality laws across different issue areas. I ask: How do governments decide whether to reform the country's legal framework and which course of legal change to pursue? Which mobilized actors, both domestic and international, influence legal change? To investigate these questions, I focus on legal reform of the banking sector in the post-communist region. This chapter is organized in the following way: to begin with, I outline three important lines of interpretation of the rule of law and clarify where my research fits in the broader context of the rule of law literature. In the next section, I explain why the transformation of the banking sector legal framework is a worthwhile subject of inquiry and how it relates to broader questions raised during the transition process. After that, I present briefly the theoretical argument that I develop in my dissertation. Next, I clarify the dependent variable in my analysis: the quality of legal reform. The following section elaborates on the independent variables, which I have organized into two categories: the domestic determinants and the international determinants of legal reform. The section presenting the independent variables in my analysis also provides greater detail of the theoretical underpinnings of my project and how my research contributes to the different literatures that I use. Subsequently, I introduce two alternative hypotheses concerning the role of economic development and culture. At the end of this chapter, I describe the research methods employed in my dissertation and summarize the research hypotheses derived from my argument about the role of strategic political action in the course of legal reform.
2007
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/8041/1/spendzharova%2Da%2D06d.pdf
Spendzharova, Aneta B. (2007) "When Does the Law Rule? The Politics of Banking Sector Legal Reform in the Post-Communist Region after 1989". In: UNSPECIFIED, Montreal, Canada. (Unpublished)
http://aei.pitt.edu/8041/
oai:aei.pitt.edu:8213
2011-02-15T22:52:51Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303035:44303035303039
74797065733D706F6C6963797061706572
Playing chicken in times of turbulence: M3 overshooting and the ECB monetary stance. EUMA Papers, Vol.4, No. 23 November 2007
Campanella, Miriam L.
monetary policy
European Central Bank
This summer subprime crisis and the subsequent credit crunch have placed central banks again on the spot. In the USA and Europe, central banks have made significant steps to calm down financial turbulence by engineering liquidity injections, and interest rate shift. In Europe, following a recent Banking Lending Survey (October 2007) signaling a tightening of the credit standards for loans to enterprises, the ECB, in a counter-cyclical effort, has managed to leave on hold interest rate. As sound as sensible the ECB move can be seen, it appears the bank set to delay action on excess of liquidity, as shown in the persisting overshooting of M3. The ECB rates halt, or a likely near-term cut, as some would suggest, could only send the wrong signal. A neglect of M3 overshooting while accelerating inflationary pressures reveals the bank’s weakness in front of eurozone politicians claiming a more accommodative policy to offset the euro’s trend appreciation. In order to escape being entrapped into the rate dilemma, this paper suggests the bank has just to make a clear-cut choice: carry out the objective of cracking down on M3 overshooting, or hand over M3 quantitative target. If not, it will be seen playing chicken in the game.
2007-11
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/8213/1/Campanella%2DThird_RevisionEdi.pdf
Campanella, Miriam L. (2007) Playing chicken in times of turbulence: M3 overshooting and the ECB monetary stance. EUMA Papers, Vol.4, No. 23 November 2007. [Policy Paper]
http://aei.pitt.edu/8213/
oai:aei.pitt.edu:8401
2011-02-15T22:53:48Z
7374617475733D707562
7375626A656374733D44:44303031:627564676574706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153746162696C69747947726F77746850616374
7375626A656374733D44:44303031:643030314C6973626F6E6167656E6461
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D706F6C6963797061706572
What's Wrong With Lisbon? Bruegel Third-Party Papers, June 2005
Pisani-Ferry, Jean.
budgets & financing
Lisbon StrategyAgenda/Partnership for Growth and Employment
monetary policy
Stability and Growth Pact
There is thus a need for a deeper investigation into the shortcomings of the Lisbon strategy. What this paper argues is that the reason for those shortcomings is a lack of incentives to coordinate reforms within the EU. It makes the point that the very rationale for undertaking reforms jointly is in fact weak for the EU as a whole while it is stronger within the Eurozone. If this analysis is correct, the conclusion is that the EU must give thoughts to improving the incentive they face, especially within the Eurozone. It must also make better use of its own instruments – the EU legislation, the budget, monetary policy and the Stability pact. This paper starts with a short assessment of economic situation in the Union and the degree to which it explains the result of the referendums. Part 2 is devoted to an evaluation of the Lisbon strategy. Part 3 discusses why this strategy did not deliver. Recommendations for improving it are made in part 4. Part 5 concludes2.
2005-06
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/8401/1/EN_What_Is_Wrong_With_Lisbon.pdf
Pisani-Ferry, Jean. (2005) What's Wrong With Lisbon? Bruegel Third-Party Papers, June 2005. [Policy Paper]
http://aei.pitt.edu/8401/
oai:aei.pitt.edu:8403
2011-02-15T22:53:49Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
Government Size and Output Volatility: Should we foresake automatic Stabilisation? Bruegel Working Papers, 2008/01, April 2008
Debrun, Xavier
Pisani-Ferry, Jean
Sapir, Andre.
monetary policy
In this working paper, Xavier Debrun, Jean Pisani-Ferry and André Sapir explore the relationships between government size and output volatility. Whilst government size contributes to macroeconomic stabilisation, the slow down in output volatility of the 1980s and 90s was due more to a combination of monetary policy improvements and financial developments. That this decline was especially pronounced in small-government countries showed a reduction in the variance of primary income was more important than government transfers and that other channels of stabilisation were available for small-government countries. For most countries in the euro area, the impact of a marginal change in the size of government is bound to be small.
2008-04
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/8403/1/WP01%2D08.pdf
Debrun, Xavier and Pisani-Ferry, Jean and Sapir, Andre. (2008) Government Size and Output Volatility: Should we foresake automatic Stabilisation? Bruegel Working Papers, 2008/01, April 2008. [Working Paper]
http://aei.pitt.edu/8403/
oai:aei.pitt.edu:8404
2011-02-15T22:53:49Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
Real Convergence, Price Level Convergence and Inflation in Europe. Bruegel Working Papers, 2007/02, April 2007
Egert, Balazs.
monetary policy
Balázs Égert, a former Visiting Fellow of Bruegel, provides a comprehensive review of the factors that can cause price levels to diverge and which are at the root of different inflation rates in Europe including the EU-27. Among others, he discusses the structural and cyclical factors influencing market and nonmarket-based service, house and goods prices, and summarise some stylised facts emerging from descriptive statistics.
2007-04
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/8404/1/WP_200702_BE.pdf
Egert, Balazs. (2007) Real Convergence, Price Level Convergence and Inflation in Europe. Bruegel Working Papers, 2007/02, April 2007. [Working Paper]
http://aei.pitt.edu/8404/
oai:aei.pitt.edu:9028
2011-02-15T22:58:26Z
7374617475733D707562
7375626A656374733D44:44303031:44303031303138:656C6D696E647573747269616C6C61626F757272656C6174696F6E73
7375626A656374733D44:44303031:44303031303138:656C6D656D706C6F796D656E74756E656D706C6F796D656E74
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
Natural Unemployment, the Role of Monetary Policy and Wage Bargaining: A Theoretical Perspective. CES Working Paper, no. 133, 2006
Collignon, Stefan.
monetary policy
employment/unemployment
industrial/labour relations
This paper models unemployment as a general equilibrium solution in labor and capital markets, while the natural rate hypothesis explains unemployment simply as a partial equilibrium in the labor market. It is shown that monetary policy can have long-run effects by affecting required returns on capital and investment. If monetary policy is primarily concerned with maintaining price stability, the interaction between wage bargaining and the central bank’s credibility as an inflation fighter becomes a crucial factor in determining employment. Different labor market institutions condition different monetary policy reactions. With centralized wage bargaining, a central bank mandate focusing primarily on price stability is sufficient. With an atomistic labor market, the central bank must also consider output as a policy objective.
2006
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/9028/1/Collignon133.pdf
Collignon, Stefan. (2006) Natural Unemployment, the Role of Monetary Policy and Wage Bargaining: A Theoretical Perspective. CES Working Paper, no. 133, 2006. [Working Paper]
http://aei.pitt.edu/9028/
oai:aei.pitt.edu:9122
2018-02-12T21:06:55Z
7374617475733D707562
7375626A656374733D46:46303036
7375626A656374733D44:44303031:4430303170707061
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666165636F6E6F6D6963706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
Politique economique: avon-nous appris? = Economic policy: what have we learned? Bruegel Third-Party Papers, May 2008
Pisani-Ferry, Jean.
public policy/public administration
monetary policy
fiscal policy
economic policy
France
This paper examines what economic policy has learned from the contemporary developments in economic research and which lessons have been drawn from them for the formulation and the implementation of French economic policy. Advances in research are grouped under three headings: the intertemporal character of private behaviour and public policies; imperfect information and its implications for policy; and political economy constraints. Next, the paper reviews three main innovations through which economic policy has adapted to this change in perspective: the independent institution; the flexible rule; and the incentive contract. The implementation of those innovations in France is compared to international experience in the fields of monetary policy, fiscal policy and public management. Finally, the paper discusses what France has been slow to adopt and implement those innovations.
2008-05
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/9122/1/JPF%2Drevue%2Deconomique%2Dmay%2D08.pdf
Pisani-Ferry, Jean. (2008) Politique economique: avon-nous appris? = Economic policy: what have we learned? Bruegel Third-Party Papers, May 2008. [Policy Paper]
http://aei.pitt.edu/9122/
oai:aei.pitt.edu:9310
2012-04-06T16:26:04Z
7374617475733D707562
7375626A656374733D44:44303031:44303031303138:656C6D656D706C6F796D656E74756E656D706C6F796D656E74
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
At what cost price stability? New Evidence about the Phillips Curve in Europe and the United States. CEPS Working Document No. 302/September 2008.
Andrea, Beccarini
Daniel, Gros
monetary policy
employment/unemployment
With inflation increasing all over the world, central banks have to consider with some care how quickly to re-establish price stability. A key issue in this context is the short-run cost in terms of foregone output and higher unemployment. In other words, our aim in this paper was to find the ‘sacrifice ratio’ for the Euro Area and for the United States. Our main findings are: The cost of reducing inflation is in most cases higher in the US than in the EA. For example, reducing (headline) inflation by 1% point requires a decline of output of 1.4% in the EU, but 2.3% for the US. Considering core inflation, the sacrifice ratio in terms of output is somewhat higher for the Euro Area (around 4) compared to 3.2 for the US. However, the sacrifice ratios in terms of unemployment are always much larger for the US. Reducing headline inflation by 1% requires an increase in unemployment of little more than 1% in the EA, compared to 8% in the US. However, there is also a long-run ‘hysterisis’ cost that is specific to the Euro Area since the reaction of unemployment to output depends on the state of the economy. During downturns this relationship worsens. This implies that a recession engineered to combat inflation will have an additional cost in terms of lower unemployment later, even after the recovery of the economy.
2008-09
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/9310/2/9310.pdf
Andrea, Beccarini and Daniel, Gros (2008) At what cost price stability? New Evidence about the Phillips Curve in Europe and the United States. CEPS Working Document No. 302/September 2008. [Working Paper]
http://aei.pitt.edu/9310/
oai:aei.pitt.edu:10966
2011-02-15T23:11:44Z
7374617475733D707562
7375626A656374733D44:44303032:44303032303039
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D776F726B696E677061706572
What lessons from the 1930s? CEPS Working Document No. 312, 7 May 2009
Gros, Daniel
Alcidi, Cinzia.
EU-US
monetary policy
fiscal policy
financial crisis 2008-on/reforms/economic governance
This paper explores three areas in which the experience of the Great Depression might be relevant today: monetary policy, fiscal policy and the systemic stability of the banking system. We confirm the consensus on monetary policy: deflation must be avoided. With regard to fiscal policy, the picture is less clear. We cannot confirm a widespread opinion according to which fiscal policy did not work because it was not tried. We find that fiscal policy went to the limit of what was possible within the confines of sustainability, as they existed then. Our investigation of the US banking system shows a surprising resilience of the sector: commercial banking operations (deposit-taking and lending) remained profitable even during the worst years. This suggests one policy conclusion: At present the authorities in both the US and Europe have little choice but to make up for the losses on ‘legacy’ assets and wait for banks to earn back their capital. But to prevent future crises of this type, one should make sure that losses from the investment banking arms cannot impair commercial banking operations. At least a partial separation of commercial and investment banking thus seems justified by the greater stability of commercial banking operations.
2009-05
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/10966/1/1839[1].pdf
Gros, Daniel and Alcidi, Cinzia. (2009) What lessons from the 1930s? CEPS Working Document No. 312, 7 May 2009. [Working Paper]
http://aei.pitt.edu/10966/
oai:aei.pitt.edu:10969
2011-02-15T23:11:45Z
7374617475733D707562
7375626A656374733D44:44303031:44303031303138:656C6D696E647573747269616C6C61626F757272656C6174696F6E73
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7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
Inflation dynamics with labour market matching: assessing alternative specifications. NBB Working Papers. No. 164, May 19, 2009
Christoffel, Kai
Costain, James
Walque, Gregory de
Kuester, Keith
Linzert, Tobias
Millard, Stephen
Pierrard, Olivier.
labour/labor
monetary policy
industrial/labour relations
This paper reviews recent approaches to modeling the labour market, and assesses their implications for inflation dynamics through both their effect on marginal cost and on price-setting behaviour. In a search and matching environment, we consider the following modeling setups: right-to-manage bargaining vs. efficient bargaining, wage stickiness in new and existing matches, interactions at the firm level between price and wage-setting, alternative forms of hiring frictions, search on-the-job and endogenous job separation. We find that most specifications imply too little real rigidity and, so, too volatile inflation. Models with wage stickiness and right-to-manage bargaining or with firm-specific labour emerge as the most promising candidates.
2009-05
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/10969/1/wp164En.pdf
Christoffel, Kai and Costain, James and Walque, Gregory de and Kuester, Keith and Linzert, Tobias and Millard, Stephen and Pierrard, Olivier. (2009) Inflation dynamics with labour market matching: assessing alternative specifications. NBB Working Papers. No. 164, May 19, 2009. [Working Paper]
http://aei.pitt.edu/10969/
oai:aei.pitt.edu:10988
2011-02-15T23:11:54Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153696E676C654D61726B6574:65666153696E676C654D61726B65746361706974616C676F6F64737365727669636573
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
Monetary policy, asset prices and macroeconomic conditions: a panel-VAR study. NBB Working Papers. No. 149, 16 October 2008
Assenmacher-Wesche, Katrin
Gerlach, Stefan.
capital, goods, services, workers
monetary policy
This paper studies the relationships between inflation, economic activity, credit, monetary policy, and residential property and equity prices in 17 OECD countries, using quarterly data for 1986-2006. Using a panel VAR, we find plausible and significant responses to a monetary policy shock. Shocks to asset prices have a positive, significant effect on GDP and credit after three to four quarters, whereas prices start to increase much later. We also consider the transmission of US shocks from the US to the other economies. While monetary policy shocks are transmitted internationally, other shocks are not, perhaps because of the form of coefficient restrictions used.
2008-10
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/10988/1/wp149En.pdf
Assenmacher-Wesche, Katrin and Gerlach, Stefan. (2008) Monetary policy, asset prices and macroeconomic conditions: a panel-VAR study. NBB Working Papers. No. 149, 16 October 2008. [Working Paper]
http://aei.pitt.edu/10988/
oai:aei.pitt.edu:10989
2011-02-15T23:11:55Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
Central bank misperceptions and the role of money in interest rate rules. NBB Working Papers. No. 147, 16 October 2008
Beck, Guenter
Wieland, Volker.
monetary policy
Research with Keynesian-style models has emphasized the importance of the output gap for policies aimed at controlling inflation while declaring monetary aggregates largely irrelevant. Critics, however, have argued that these models need to be modified to account for observed money growth and inflation trends, and that monetary trends may serve as a useful cross-check for monetary policy. We identify an important source of monetary trends in form of persistent central bank misperceptions regarding potential output. Simulations with historical output gap estimates indicate that such misperceptions may induce persistent errors in monetary policy and sustained trends in money growth and inflation. If interest rate prescriptions derived from Keynesian-style models are augmented with a cross-check against money-based estimates of trend inflation, inflation control is improved substantially.
2008-10
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/10989/1/wp147En.pdf
Beck, Guenter and Wieland, Volker. (2008) Central bank misperceptions and the role of money in interest rate rules. NBB Working Papers. No. 147, 16 October 2008. [Working Paper]
http://aei.pitt.edu/10989/
oai:aei.pitt.edu:10990
2011-02-15T23:11:56Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666167656E6572616C
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
Liquidity, inflation and asset prices in a timevarying framework for the euro area. NBB Working Papers. No. 142, 16 October 2008
Baumeister, Christiane
Durinck, Eveline
Peersman, Gert.
monetary policy
general
EMU/EMS/euro
In this paper, we investigate how the dynamic effects of excess liquidity shocks on economic activity, asset prices and inflation differ over time. We show that the impact varies considerably over time, depends on the source of increased liquidity (M1, M3-M1 or credit) and the underlying state of the economy (asset price boom-bust, business cycle, inflation cycle, credit cycle and monetary policy stance).
2008-10
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/10990/1/wp142En.pdf
Baumeister, Christiane and Durinck, Eveline and Peersman, Gert. (2008) Liquidity, inflation and asset prices in a timevarying framework for the euro area. NBB Working Papers. No. 142, 16 October 2008. [Working Paper]
http://aei.pitt.edu/10990/
oai:aei.pitt.edu:10996
2011-02-15T23:11:57Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153696E676C654D61726B6574:65666153696E676C654D61726B65746361706974616C676F6F64737365727669636573
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
Imperfect exchange rate pass-through: the role of distribution services and variable demand elasticity. NBB Working Papers No. 135, 18 August 2008
Jeanfils, Philippe.
capital, goods, services, workers
monetary policy
This paper examines which mechanisms are likely to dampen the price pressures in the wake of exchange rate movements. In addition to nominal frictions frequently used in sticky-price models, it jointly introduces two features that have hitherto been considered separately in the existing literature, i.e. a variable demand elasticity à la Kimball (1995) and distribution services in the form of non-traded goods as in Corsetti and Dedola (2005). The paper explores the respective role of each feature and assesses the quantitative importance of these theoretical explanations for the exchange rate pass-through to a broad range of prices as well as for the real exchange rate and for the trade balance. Segmentation of national markets through distribution services and imperfect competition with variable mark-ups are important for accounting for the observed stability of import prices "at the border". Hence, these mechanisms help to explain the observed stability of import prices in local currency with realistic durations of price contracts.
2008-08
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/10996/1/WP135En.pdf
Jeanfils, Philippe. (2008) Imperfect exchange rate pass-through: the role of distribution services and variable demand elasticity. NBB Working Papers No. 135, 18 August 2008. [Working Paper]
http://aei.pitt.edu/10996/
oai:aei.pitt.edu:11006
2011-02-15T23:12:03Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
Estimation of monetary policy preferences in a forward-looking model: a Bayesian approach. NBB Working Papers No. 129, 13 March 2008
Ilbas, Pelin.
monetary policy
In this paper, we adopt a Bayesian approach to estimating monetary policy preference parameters in a general equilibrium framework. We start out from the model presented by Smets and Wouters (2003) for the euro area, where, in the original set-up, monetary policy behaviour is described by an empirical rule. We abandon this way of representing monetary policy behaviour and instead assume that monetary policy authorities optimise an intertemporal quadratic loss function under commitment. We consider two alternative specifications for the loss function. The first specification includes inflation, the output gap and difference in the interest rate as target variables. The second loss function includes an additional wage inflation target. The weights assigned to the target variables in the loss functions, i.e. the preferences of monetary policy, are estimated jointly with the structural parameters in the model. The results imply that inflation variability remains the main concern of optimal monetary policy. In addition, interest rate smoothing and the output gap appear to be important target variables as well, albeit to a lesser extent. Comparing the marginal likelihood of the original Smets and Wouters (2003) model to our specification with optimal monetary policy indicates that the latter performs only slightly worse. Since we are faced with the time-inconsistency problem under commitment, we initialise our estimates by considering a pre-sample period of 40 quarters. This enables an empirical approach to the timeless perspective framework.
2008-03
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11006/1/wp129En.pdf
Ilbas, Pelin. (2008) Estimation of monetary policy preferences in a forward-looking model: a Bayesian approach. NBB Working Papers No. 129, 13 March 2008. [Working Paper]
http://aei.pitt.edu/11006/
oai:aei.pitt.edu:11015
2011-02-15T23:12:06Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153696E676C654D61726B6574:65666153696E676C654D61726B65746361706974616C676F6F64737365727669636573
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
Monitoring pro-cyclicality under the capital requirements directive: preliminary concepts for developing a framework. NBB Working Papers. No. 120, 31 October 2007
Masschelein, Nancy.
capital, goods, services, workers
monetary policy
This paper provides an overview of the questions that will need to be addressed in order to determine whether increased cyclicality in capital requirements will exacerbate the pro-cyclicality in the financial system. Many central banks have raised concerns about the potential cost of pro-cyclicality that could come with the Basel II framework, which will be implemented in the EU via the Capital Requirements Directive (CRD). Previous capital adequacy rules required banks to hold a minimum amount of capital for each loan, regardless of the different risks involved. The main objective of the Basel II framework/CRD is to make capital requirements more risk-sensitive. Therefore, by construction, the capital requirements under the CRD will be more cyclical than under the previous rules. This raises two questions. First, does it matter whether regulatory capital requirements fluctuate more than before if banks’ (lending) behaviour is driven by other capital considerations (for example economic capital) ? Second, if it does matter, what impact will this have on the economic cycle?
2007-10
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11015/1/wp120En.pdf
Masschelein, Nancy. (2007) Monitoring pro-cyclicality under the capital requirements directive: preliminary concepts for developing a framework. NBB Working Papers. No. 120, 31 October 2007. [Working Paper]
http://aei.pitt.edu/11015/
oai:aei.pitt.edu:11091
2011-02-15T23:12:38Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153696E676C654D61726B6574:65666153696E676C654D61726B65746361706974616C676F6F64737365727669636573
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D706F6C6963797061706572
Gains for All: A proposal for a common Eurobond. CEPS Commentaries, 3 April 2009
Grauwe, Paul De
Moesen, Wim.
capital, goods, services, workers
monetary policy
financial crisis 2008-on/reforms/economic governance
Until the eruption of the credit crisis in August 2007 financial markets were gripped by a ‘flight to risk’. The perception was that risks were very low. This perception was fed by the rating agencies that liberally distributed top ratings to dubious assets. Dulled by this low risk perception, investors and financial institutions accumulated vast amounts of risky assets on their balance sheets. Today the markets have moved to the other extreme and perceive risks everywhere. They are now gripped by a ‘flight to safety’. This has profound implications for the workings of the government bond markets in the eurozone. In this new CEPS Commentary, Paul De Grauwe and Wim Moesen explain how authorities can attempt to offset the distorting effects these cycles produce.
2009-04
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11091/1/1823[1].pdf
Grauwe, Paul De and Moesen, Wim. (2009) Gains for All: A proposal for a common Eurobond. CEPS Commentaries, 3 April 2009. [Policy Paper]
http://aei.pitt.edu/11091/
oai:aei.pitt.edu:11094
2015-08-03T19:40:50Z
7374617475733D707562
7375626A656374733D46:46303238
7375626A656374733D46:46303239
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7375626A656374733D46:46303139
7375626A656374733D44:44303035:4430303565667366
74797065733D706F6C6963797061706572
Collapse in Eastern Europe? The rationale for the creation of a European Financial Stability Fund. CEPS Commentaries, 25 February 2009
Gros, Daniel.
European Financial Stability Facility
Estonia
Hungary
Latvia
Lithuania
Poland
Romania
Slovak Republic
Slovenia
Bulgaria
Czech Republic
monetary policy
financial crisis 2008-on/reforms/economic governance
In this new commentary, CEPS Director Daniel Gros looks at the threat posed to EU banks by their exposure to capital flights and currency attacks in Eastern Europe, recommending the creation of a large scale, temporary European Financial Stability Fund to deal with the crisis.
2009-02
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11094/1/1804[1].pdf
Gros, Daniel. (2009) Collapse in Eastern Europe? The rationale for the creation of a European Financial Stability Fund. CEPS Commentaries, 25 February 2009. [Policy Paper]
http://aei.pitt.edu/11094/
oai:aei.pitt.edu:11228
2011-02-15T23:13:28Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153696E676C654D61726B6574:65666153696E676C654D61726B65746361706974616C676F6F64737365727669636573
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D706F6C6963797061706572
A solution for Europe's banking problem. Bruegel Policy Brief No. 2009/03, 12 June 2009
Posen, Adam
Véron, Nicolas.
financial crisis 2008-on/reforms/economic governance
capital, goods, services, workers
monetary policy
Nicolas Véron and Adam Posen believe Europe should build new long term European joint-action to face the likely high rising number of insolvent banks on the continent. The authors propose on the one hand, a centralised triage and restructuring process of bad European banks lead by a new temporary European Institution, a European Bank Support Authority (EBSA), and on the other hand, long-term EU Institutions dedicated to the completion of an integrated market. Unprecedented state intervention on both sides of the Atlantic since October 2008 has prevented outright financial breakdown. But as long as many of its banks are insolvent or likely to become so, Europe will suffer continued economic misery, given the predominance of traditional banking in corporate finance and household savings on the continent. A lesson from major past crises is that the drag on growth will persist until the most fragile banks are openly identified and fixed. Such a process always requires great political will. In Europe, the challenge is compounded by institutional mismatch, namely the combination of a largely integrated market with national supervisory structures. Because of cross-border linkages, national approaches cannot be expected to deliver the necessary unbiased results.
2009-06
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11228/1/BruegelPolicyBrief_Europe_s_banking_problem_110609.pdf
Posen, Adam and Véron, Nicolas. (2009) A solution for Europe's banking problem. Bruegel Policy Brief No. 2009/03, 12 June 2009. [Policy Paper]
http://aei.pitt.edu/11228/
oai:aei.pitt.edu:11264
2011-02-15T23:13:39Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303035:44303035303039
74797065733D706F6C6963797061706572
A New Two-Pillar Strategy for the ECB. CEPS Policy Brief No. 191, 30 June 2009
de Grauwe, Paul
Gros, Daniel.
monetary policy
European Central Bank
This paper explores the question of whether there is a trade-off between maintaining price stability and financial stability (much in the same way as there can be a trade-off between price stability and output stability when supply shocks occur) and if so, which of the two objectives should take precedence. The authors analyse how such a trade-off can arise and further examine the issue of how to define and monitor financial stability and assess which policy instruments the ECB could deploy to maintain financial stability.
2009-06
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11264/1/1866.pdf
de Grauwe, Paul and Gros, Daniel. (2009) A New Two-Pillar Strategy for the ECB. CEPS Policy Brief No. 191, 30 June 2009. [Policy Paper]
http://aei.pitt.edu/11264/
oai:aei.pitt.edu:11273
2011-02-15T23:13:40Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153696E676C654D61726B6574:65666153696E676C654D61726B65746361706974616C676F6F64737365727669636573
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D706F6C6963797061706572
A crisis is a terrible thing to waste. CEPS Commentary, 29 May 2009
Lannoo, Karel.
financial crisis 2008-on/reforms/economic governance
capital, goods, services, workers
monetary policy
Now, almost two years into the worst financial crisis in Europe’s recent history, CEPS CEO Karel Lannoo finds that the EU seems to be incapable of drawing the necessary lessons. If Europe is serious about tackling the crisis and wants to be seen as such, he argues that it needs to make proposals for a European system of financial supervisors, not a network. This means empowering a strong centre which can, following the principle of subsidiarity, effectively and unequivocally act on behalf of the European interest and police national supervisory authorities.
2009-05
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11273/1/1847.pdf
Lannoo, Karel. (2009) A crisis is a terrible thing to waste. CEPS Commentary, 29 May 2009. [Policy Paper]
http://aei.pitt.edu/11273/
oai:aei.pitt.edu:11276
2011-02-15T23:13:41Z
7374617475733D707562
7375626A656374733D44:44303035:69646F7067:69646F7067646D706D
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D706F6C6963797061706572
Institution-Building in Action. CEPS Commentary, 22 June 2009
Gros, Daniel.
monetary policy
financial crisis 2008-on/reforms/economic governance
decision making/policy-making
Following publication of the de Larosière report in February 2009, the EU machinery has finally swung into action and is now delivering concrete proposals for the much-needed new European architecture for financial supervision. In his assessment of the initial steps proposed by the Commission in May and endorsed by the European Council in June, CEPS Director Daniel Gros finds that while they are not revolutionary in the sense of creating new powers for supervision at the EU level, they are potentially of immense importance as it is the EU that will create a number of new institutions. In his view, one should not underestimate the importance of this development, given that the history of the EU has shown repeatedly how the existence of strong institutions can fundamentally alter the distribution of power and thus affect policy.
2009-06
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11276/1/1860%2D1.pdf
Gros, Daniel. (2009) Institution-Building in Action. CEPS Commentary, 22 June 2009. [Policy Paper]
http://aei.pitt.edu/11276/
oai:aei.pitt.edu:11332
2011-02-15T23:13:58Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D706F6C6963797061706572
Why Europe will suffer more. CEPS Policy Brief No. 194, 16 July 2009
Gros, Daniel.
financial crisis 2008-on/reforms/economic governance
monetary policy
Even though the financial crisis might have started in the US, CEPS Director Daniel Gros finds in a new CEPS Policy Brief that even more combustible material had accumulated in Europe, and that therefore that it likely that the cost will be higher here and the recovery slower than on the other side of the Atlantic. This conclusion is based on a careful analysis of two indicators of looming financial instability: credit expansion (or leverage) and asset price bubbles.
2009-07
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11332/1/1874.pdf
Gros, Daniel. (2009) Why Europe will suffer more. CEPS Policy Brief No. 194, 16 July 2009. [Policy Paper]
http://aei.pitt.edu/11332/
oai:aei.pitt.edu:11439
2011-02-15T23:14:35Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153696E676C654D61726B6574:65666153696E676C654D61726B65746361706974616C676F6F64737365727669636573
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D706F6C6963797061706572
The Crisis and citizens' trust in central banks. CEPS Commentaries, 26 August 2009
Gros, Daniel
Roth, Felix.
monetary policy
capital, goods, services, workers
financial crisis 2008-on/reforms/economic governance
Despite the constructive role played by central banks in stabilising financial systems throughout the crisis, trust in central banks has declined and the reaction of central banks to the crisis is generally judged as unsatisfactory. In a new Commentary, Daniel Gros and Felix Roth warn that central bankers all over the world must redouble their efforts to regain the trust of their citizens towards their institutions or they will face political problems sooner or later.
2009-08
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11439/1/1901.pdf
Gros, Daniel and Roth, Felix. (2009) The Crisis and citizens' trust in central banks. CEPS Commentaries, 26 August 2009. [Policy Paper]
http://aei.pitt.edu/11439/
oai:aei.pitt.edu:11463
2011-02-15T23:47:17Z
oai:aei.pitt.edu:11496
2016-01-30T17:24:21Z
7374617475733D707562
7375626A656374733D44:44303031:627564676574706F6C696379
7375626A656374733D44:44303031:706F6C69746963616C6166666169727331323334:70616666676F7665726E616E6365
7375626A656374733D44:44303032:44303032303132
7375626A656374733D44:44303032:44303032696E7465726E6174696F6E616C65636F6E6F6D79
7375626A656374733D44:44303033:44303033303032
7375626A656374733D44:44303031:44303031303230
7375626A656374733D44:44303031:44303031303332
7375626A656374733D44:44303031:44303031303130
7375626A656374733D44:44303031:44303031303138:656C6D6C61626F75726C61626F72
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153696E676C654D61726B6574:65666153696E676C654D61726B65746361706974616C676F6F64737365727669636573
7375626A656374733D44:44303032:443030324575726F7065616E4E65696768626F7572686F6F64506F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303031:44303031303139
74797065733D706F6C6963797061706572
Memos to the new Commission- Europe's economic priorities 2010-2015. Bruegel Blueprint Series No. (10?), 27 August 2009
Darvas, Zsolt
Pisani-Ferry, Jean
Röller, Lars-Hendrik
Santos, Indhira
Sapir, André
van Pottelsberghe, Bruno
Véron, Nicholas
Veugelers, Reinhilde
von Hagen, Jürgen
von Weizsäcker, Jakob.
governance: EU & national level
international economy
rtd (RTD) policy/European Research Area
development
enlargement
energy policy (Including international arena)
European Neighbourhood Policy
budgets & financing
labour/labor
capital, goods, services, workers
monetary policy
competition policy
environmental policy (including international arena)
These Memos, addressed to the next Commission President and to the new European commissioners, are written by Bruegel Scholars and edited by Senior Research Fellow André Sapir and focus on key economic aspects of EU policy-making. The new Commission will enter office at a challenging time for Europe, the EU and the Commission itself. The crisis has clearly exposed weaknesses in EU governance which need to be addressed and the memos make a number of concrete recommendations of relevance for major economic fields, as well as for the EU and Commission as a whole. Addressing the next Commission President, André Sapir and Jean Pisani-Ferry propose that effective leadership will be necessary to give strategic direction to the Commission, “you [the president] should therefore be ready to fight for ideas and take risks” (JPF-AS). The Memos suggest that the EU will need to assert a position on commonly agreed rules, propose new solutions and, importantly, has an opportunity now to redefine the European narrative in the global arena. Focusing on the most important economic questions at EU level, the Bruegel memos are intended to be strategic, outlining the state of affairs that will be met by the new Commission and the key challenges and priorities they will need to consider over the next five years.
Sapir, André.
2009-08
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11496/1/comm_memos_082009.pdf
Darvas, Zsolt and Pisani-Ferry, Jean and Röller, Lars-Hendrik and Santos, Indhira and Sapir, André and van Pottelsberghe, Bruno and Véron, Nicholas and Veugelers, Reinhilde and von Hagen, Jürgen and von Weizsäcker, Jakob. (2009) Memos to the new Commission- Europe's economic priorities 2010-2015. Bruegel Blueprint Series No. (10?), 27 August 2009. [Policy Paper]
http://aei.pitt.edu/11496/
oai:aei.pitt.edu:11497
2011-02-15T23:15:01Z
7374617475733D707562
7375626A656374733D46:46303236
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D706F6C6963797061706572
The monetary mechanics of the crisis. Bruegel Policy Contribution 2009/08, August 2009
von Hagen, Jürgen.
U.K.
monetary policy
financial crisis 2008-on/reforms/economic governance
In response to the financial and economic crisis, central banks, unlike in the 1930s, have created enormous amounts of money. There are fears that this will lead to inflation, but it is base money (the central bank's liabilities) that has expanded; total monetary aggregates have not. By contrast, in the 1930s, base money remained stable and monetary aggregates dropped. The reason for this is that in a crisis the relationship between the base money and monetary aggregates is altered. The money multiplier drops. It is therefore necessary to create more base money so that monetary aggregates remain stable. This is what central banks have done in the current crisis – and rightly so. They have learned the lessons of the Great Depression. This framework helps understand differences across countries. The crisis affected the euro area money and credit supply process much less than the US and the UK. Therefore, the European Central Bank was right to respond to the crisis with a less expansionary monetary policy than the Bank of England and the Federal Reserve. However, stabilising the money supply may not have been enough to stabilise the supply of credit.
2009-08
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11497/1/pc_mon_mechanics_280809.pdf
von Hagen, Jürgen. (2009) The monetary mechanics of the crisis. Bruegel Policy Contribution 2009/08, August 2009. [Policy Paper]
http://aei.pitt.edu/11497/
oai:aei.pitt.edu:11561
2011-02-15T23:15:21Z
7374617475733D707562
7375626A656374733D44:44303032:44303032696E7465726E6174696F6E616C65636F6E6F6D79
7375626A656374733D45:45303033
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153696E676C654D61726B6574:65666153696E676C654D61726B65746361706974616C676F6F64737365727669636573
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D706F6C6963797061706572
Europe`s Two Priorities for the G20. CEPS Commentaries, 14 November 2008
Gros, Daniel.
international economy
monetary policy
capital, goods, services, workers
G7/G8/G20
financial crisis 2008-on/reforms/economic governance
In his Commentary published in the run-up to the G20 summit in Washington on 15 November 2008, CEPS Director Daniel Gros attributes the global financial crisis to two macroscopic failures: monetary policy should have reacted earlier to the boom in house prices and regulators should have forced banks to accumulate larger reserves for the tougher times that had to come sooner or later. He asserts that the root causes for these failures need to be understood properly before trying to create a new Bretton Woods.
2008-11
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11561/1/1756[1].pdf
Gros, Daniel. (2008) Europe`s Two Priorities for the G20. CEPS Commentaries, 14 November 2008. [Policy Paper]
http://aei.pitt.edu/11561/
oai:aei.pitt.edu:11656
2011-02-15T23:15:53Z
7374617475733D707562
7375626A656374733D44:44303032:44303032303039
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
The challenge of measuring inflation...when business is not as usual. CEPS Working Document No. 306, October 2008
Mortensen, Jørgen
Frale, Cecilia
EU-US
monetary policy
The recent surge in commodity prices and the European Central Bank’s decision in June to raise interest rates to combat inflation have ignited a debate about the appropriateness of raising interest rates during a phase of weakening activity. In addition, it is relevant to examine the approaches to measuring the rate of inflation, to consider the advantages and drawbacks of these methods, and finally to throw new light on the possible influence of monetary policy on the fundamental trends in prices. This paper presents a critical review of the methods of measuring inflation for the euro area and the US, analysing i) the adequacy of the consumer price index (CPI) weighting scheme, ii) the different definitions of inflation used on the two sides of the Atlantic, iii) the drawbacks of the current measures in the face of changing times and iv) some alternatives for the inflation computation. As far as the weighting scheme is concerned, the main finding is that the weighting scheme applied by the US CPI exaggerates the weights of education, food and energy, while in Europe the weights in the CPI are closer to the expenditure weights with the exception of the weights of restaurants and hotels. Furthermore, this paper asserts that substitution among different categories of spending – as consumers and producers shift e.g. towards cheaper energy or food sources or less energy-intensive goods and services – might bias standard measures of price increases. To the extent that the standard measurement of inflation fails to take account of the scope for substitution, this will also have an impact on the measurements of real income and output. The paper therefore argues in favour of calculating and publishing the results of alternative weighting schemes for measuring inflation.
2008-10
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11656/1/1739.pdf
Mortensen, Jørgen and Frale, Cecilia (2008) The challenge of measuring inflation...when business is not as usual. CEPS Working Document No. 306, October 2008. [Working Paper]
http://aei.pitt.edu/11656/
oai:aei.pitt.edu:11658
2011-02-15T23:15:55Z
7374617475733D756E707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153696E676C654D61726B6574:65666153696E676C654D61726B65746361706974616C676F6F64737365727669636573
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
Stock Prices and Monetary Policy. CEPS Working Document No. 304, September 2008
De Grauwe, Paul.
monetary policy
capital, goods, services, workers
The question of whether central banks should target stock prices so as to prevent bubbles and crashes from occurring has been hotly debated. This paper analyses this question using a behavioural macroeconomic model. This model generates bubbles and crashes. It analyses how ‘leaning against the wind’ strategies, which aim to reduce the volatility of stock prices, can help in reducing volatility of output and inflation. We find that such policies can be effective in reducing macroeconomic volatility, thereby improving the trade-off between output and inflation variability. The strength of this result, however, depends on the degree of credibility of the inflation-targeting regime. In the absence of such credibility, policies aiming at stabilising stock prices do not stabilise output and inflation.
2008-09
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11658/1/1713.pdf
De Grauwe, Paul. (2008) Stock Prices and Monetary Policy. CEPS Working Document No. 304, September 2008. [Working Paper] (Unpublished)
http://aei.pitt.edu/11658/
oai:aei.pitt.edu:11670
2011-02-15T23:16:01Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:44303031303335:737077656C666172657374617465
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D776F726B696E677061706572
Fiscal Policy in the New Open Economy; Macroeconomics and Prospects for Fiscal Policy. Coordination; CEPS Working Document No. 193, June 2003
Coutinho, Leonor.
monetary policy
fiscal policy
welfare state
EMU/EMS/euro
This paper reviews the analysis of fiscal policy in the new open economy macroeconomics literature, in view of increasing interest in the question of transmission and coordination of policies across countries, stirred by developments in this literature and by the formation of the euro area. The analysis focuses on two main points: (i) the identification of welfare spillover effects to third countries; and (ii) the assessments made so far of the potential gains from pursuing non-cooperative and cooperative fiscal stabilisation policies. Regarding welfare spillovers, some additional results are derived to examine whether the exchange rate regime (flexible or fixed) matters for the size of these spillovers, and whether the type of policy pursued (balanced-budget or debtfinanced) matters. Fixed exchange rates only seem to postpone the costs from the short to the long run, but the type of policy is crucial in determining the welfare impact of fiscal expansions. With respect to policy coordination, attention is drawn to the need to reflect on a potential role for fiscal policy as a stabilisation tool, and on possible interactions between fiscal and monetary policy.
2003-06
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11670/1/1040.pdf
Coutinho, Leonor. (2003) Fiscal Policy in the New Open Economy; Macroeconomics and Prospects for Fiscal Policy. Coordination; CEPS Working Document No. 193, June 2003. [Working Paper]
http://aei.pitt.edu/11670/
oai:aei.pitt.edu:11671
2011-02-15T23:16:01Z
7374617475733D707562
7375626A656374733D44:44303032:44303032303039
7375626A656374733D44:44303032:44303032696E7465726E6174696F6E616C65636F6E6F6D79
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303035:44303035303039
74797065733D776F726B696E677061706572
Monetary Policy Rules and the International Monetary Transmission. CEPS Working Document No. 191, October 2002
Coutinho, Leonor.
international economy
European Central Bank
EU-US
monetary policy
This paper analyses alternative monetary policy rules for the ECB, using a two "country" model of the euro area and the US, that assumes monopolistic competition, sticky prices and optimizing agents. The alternative rules analyzed for the ECB are ranked by their ability to stabilize consumption, output, and inflation and maximize consumers’ welfare. The analysis contributes toward understanding the trade-offs faced by policymakers in open economies and provides some support for the current design of the ECB’s operational framework. The results suggest that stabilizing money-growth, in addition to inflation, gives an additional degree of freedom to stabilize output. Although price stability is likely to remain the primary objective of the ECB, monetary policy must “without prejudice of price stability (...) support the general economic policies in the Community...” (Article 2). Hence monitoring money, under certain assumptions about the shocks hitting the economy, may deliver a better outcome in terms of output stabilization which should allow the ECB to fulfill its secondary but nonetheless important commitment.
2002-10
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11671/1/101.pdf
Coutinho, Leonor. (2002) Monetary Policy Rules and the International Monetary Transmission. CEPS Working Document No. 191, October 2002. [Working Paper]
http://aei.pitt.edu/11671/
oai:aei.pitt.edu:11766
2011-02-15T23:16:38Z
7374617475733D707562
7375626A656374733D46:46303032
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
Micro data on nominal rigidity, inflation persistence and optimal monetary policy. NBB Working Paper 175, September 2009
Kara, Engin.
Belgium
monetary policy
The popular Calvo model with indexation (Christiano, Eichenbaum and Evans, 2005) and sticky information (Mankiw and Reis (2002) model have guided much of the monetary policy discussion. The strength of these approaches is that they can explain the persistence of inflation. However, both of these theories are inconsistent with the micro data on prices. In this paper, I evaluate the consequences of implementing policies that are optimal from the perspective of models that overlook the micro-data. To do so, I employ a Generalized Taylor Economy (GTE) (Dixon and Kara, 2007). While there is no material difference between the GTE and its popular alternatives in terms of inflation persistence, a difference arises when it comes to the micro-data: the GTE is consistent with the micro-data. The findings reported in the paper suggest that policy conclusions are significantly affected by whether persistence arises in a manner consistent with the micro-data and that policies that are optimal from the perspective of the models that are inconsistent with the micro-data can lead to large welfare losses in the GTE.
2009-09
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11766/1/wp175En.pdf
Kara, Engin. (2009) Micro data on nominal rigidity, inflation persistence and optimal monetary policy. NBB Working Paper 175, September 2009. [Working Paper]
http://aei.pitt.edu/11766/
oai:aei.pitt.edu:11768
2011-02-15T23:16:39Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
How are firms' wages and prices linked: survey evidence in Europe. NBB Working Paper 174, August 2009
Druant, Martine
Fabiani, Silvia
Kezdi, Gabor
Lamo, Ana
Martins, Fernando
Sabbatini, Roberto
monetary policy
This paper presents new evidence on the patterns of price and wage adjustment in European firms and on the extent of nominal rigidities. It uses a unique dataset collected through a firm-level survey conducted in a broad range of countries and covering various sectors. Several conclusions are drawn from this evidence. Firms adjust wages less frequently than prices: the former tend to remain unchanged for about 15 months on average, the latter for around 10 months. The degree of price rigidity varies substantially across sectors and depends strongly on economic features, such as the intensity of competition, the exposure to foreign markets and the share of labour costs in total cost. Instead, country specificities, mostly related to the labour market institutional setting, are more relevant in characterising the pattern of wage adjustment. The latter exhibits also a substantial degree of time-dependence, as firms tend to concentrate wage changes in a specific month, mostly January in the majority of countries. Wage and price changes feed into each other at the micro level and there is a relationship between wage and price rigidity.
2009-08
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11768/1/wp174En.pdf
Druant, Martine and Fabiani, Silvia and Kezdi, Gabor and Lamo, Ana and Martins, Fernando and Sabbatini, Roberto (2009) How are firms' wages and prices linked: survey evidence in Europe. NBB Working Paper 174, August 2009. [Working Paper]
http://aei.pitt.edu/11768/
oai:aei.pitt.edu:11769
2011-02-15T23:16:39Z
7374617475733D707562
7375626A656374733D44:44303031:44303031303138:656C6D656D706C6F796D656E74756E656D706C6F796D656E74
7375626A656374733D46:46303032
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
Evaluating a monetary business cycle model with unemployment for the euro area. NBB Working Paper 173, July 2009
Groshenny, Nicolas.
Belgium
monetary policy
employment/unemployment
This paper estimates a medium-scale DSGE model with search unemployment by matching model and data spectra. Price mark-up shocks emerge as the main source of business-cycle fluctuations in the euro area. Key factors in the propagation of these disturbances are a high degree of inflation indexation and a persistent response of monetary policy to deviations from the inflation target.
2009-07
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11769/1/wp173En.pdf
Groshenny, Nicolas. (2009) Evaluating a monetary business cycle model with unemployment for the euro area. NBB Working Paper 173, July 2009. [Working Paper]
http://aei.pitt.edu/11769/
oai:aei.pitt.edu:11776
2011-02-15T23:16:41Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153696E676C654D61726B6574:65666153696E676C654D61726B65746361706974616C676F6F64737365727669636573
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
Back to the basics in banking? A micro-analysis of banking system stability. NBB Working Paper 167, June 2009
De Jonghe, Olivier
monetary policy
capital, goods, services, workers
This paper analyzes the relationship between banks’ divergent strategies toward specialization and diversification of financial activities and their ability to withstand a banking sector crash. We first generate market-based measures of banks’ systemic risk exposures using extreme value analysis. Systemic banking risk is measured as the tail beta, which equals the probability of a sharp decline in a bank’s stock price conditional on a crash in a banking index. Subsequently, the impact of (the correlation between) interest income and the components of non-interest income on this risk measure is assessed. The heterogeneity in extreme bank risk is attributed to differences in the scope of non-traditional banking activities: non-interest generating activities increase banks’ tail beta. In addition, smaller banks and better-capitalized banks are better able to withstand extremely adverse conditions. These relationships are stronger during turbulent times compared to normal economic conditions. Overall, diversifying financial activities under one umbrella institution does not improve banking system stability, which may explain why financial conglomerates trade at a discount.
2009-06
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11776/1/wp167En.pdf
De Jonghe, Olivier (2009) Back to the basics in banking? A micro-analysis of banking system stability. NBB Working Paper 167, June 2009. [Working Paper]
http://aei.pitt.edu/11776/
oai:aei.pitt.edu:11778
2011-02-15T23:16:41Z
7374617475733D707562
7375626A656374733D46:46303032
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
Input-output connections between sectors and optimal monetary policy. NBB Working Paper 166, June 2009
Kara, Engin.
Belgium
monetary policy
This paper considers the monetary policy implications of a model that features input-output connections between stages of production, so that a distinction between CPI inflation and PPI inflation arises. More specifically, this paper addresses the policy conclusion by K. Huang and Z. Liu [2005, "Inflation targeting: What inflation rate to target", Journal of Monetary Economics 52], which states that central banks should use an optimal inflation index that gives substantial weight to stabilising both CPI and PPI. This paper argues that these authors' findings rely on the assumption that producer prices are as sticky as consumer prices and it also shows that, once empirically relevant frequencies of price adjustment are used to calibrate the model, CPI inflation receives substantial weight in the optimal inflation index. Moreover, this rule is remarkably robust to uncertainty regarding the model parameters, whereas the policy rule proposed by Huang and Liu can result in heavy welfare losses.
2009-06
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11778/1/wp166En.pdf
Kara, Engin. (2009) Input-output connections between sectors and optimal monetary policy. NBB Working Paper 166, June 2009. [Working Paper]
http://aei.pitt.edu/11778/
oai:aei.pitt.edu:11779
2011-02-15T23:16:42Z
7374617475733D707562
7375626A656374733D46:46303032
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
Understanding inflation dynamics: Where do we stand? NBB Working Paper 165, June 2009
Dossche, Maarten.
Belgium
monetary policy
I summarize recent progress made in the literature on inflation dynamics. This has been a very productive area of research due to the development of the so-called New Keynesian model and the availability of new macroeconomic and microeconomic evidence. Nevertheless, a number of problems still subsist. In particular the importance of temporary price markdowns to inflation dynamics and the characteristics of the information set price-setters use for their price adjustment decision currently constitute unresolved issues.
2009-06
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11779/1/wp165En.pdf
Dossche, Maarten. (2009) Understanding inflation dynamics: Where do we stand? NBB Working Paper 165, June 2009. [Working Paper]
http://aei.pitt.edu/11779/
oai:aei.pitt.edu:11818
2011-02-15T23:16:56Z
7374617475733D707562
7375626A656374733D44:44303031:627564676574706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153696E676C654D61726B6574:65666153696E676C654D61726B65746361706974616C676F6F64737365727669636573
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D706F6C6963797061706572
A European Exit Strategy. Bruegel Policy Brief 2009/05, 15 October 2009
von Hagen, Jürgen
Pisani-Ferry, Jean
von Weizsäcker, Jakob.
monetary policy
capital, goods, services, workers
financial crisis 2008-on/reforms/economic governance
budgets & financing
This Policy Brief was adapted from a paper written by the three authors and presented by Bruegel Director Jean Pisani-Ferry at the informal ECOFIN Council meetings in Gothenburg, Sweden, on 1 Oct. In the brief, the authors argue that bank recapitalisation and restructuring should be a matter of urgency for EU member states and that governments should not undertake the necessary fiscal and monetary policy exit until problems within the financial sector are addressed. The authors also recommend that European states set debt targets to be reached by the end of 2014 and explain that proper incentives are necessary to ensure that an exit strategy, once implemented, is done so in coordination between various institutional actors. Such a policy framework should be in place by summer 2010, the authors say, in order to avoid a buildup of financial instability during the process.
2009-10
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11818/1/pb_exitstrategies_151009.pdf
von Hagen, Jürgen and Pisani-Ferry, Jean and von Weizsäcker, Jakob. (2009) A European Exit Strategy. Bruegel Policy Brief 2009/05, 15 October 2009. [Policy Paper]
http://aei.pitt.edu/11818/
oai:aei.pitt.edu:11878
2011-02-15T23:17:16Z
7374617475733D707562
7375626A656374733D46:46303032
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
Optimal monetary policy and firm entry. NBB Working Paper 178, October 2009
Lewis, Vivien.
Belgium
monetary policy
This paper describes optimal monetary policy in an economy with monopolistic competition, endogenous firm entry, a cash-in-advance constraint and pre-set wages. Firms must make profits in order to cover entry costs; thus a mark-up on goods prices is necessary. Without this mark-up, profits would be zero and no firm would enter the market, resulting in zero production. Therefore, the mark-up should not be removed. In this economy with market entrants, goods are more expensive than in a competitive economy with marginal cost pricing. This leads to a misallocation of resources, because leisure is not sold at a mark-up. Goods and leisure are two sources of utility that households trade off against each other. Thus, they may buy too much leisure instead of consumption goods. The consequence is that labour supply and production are sub-optimally low. Due to the labour requirement at market entry stage, insufficient labour supply also implies too little entry and too few firms in equilibrium. In the absence of fiscal instruments such as labour income subsidies, the optimal monetary policy under sticky wages achieves higher welfare than under flexible wages. The policy-maker uses the money supply instrument to raise the real wage - the cost of leisure - above its flexible-wage level, in response to expansionary shocks. This induces a rise in labour supply, more production of goods and more new firms.
2009-10
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11878/1/wp178En.pdf
Lewis, Vivien. (2009) Optimal monetary policy and firm entry. NBB Working Paper 178, October 2009. [Working Paper]
http://aei.pitt.edu/11878/
oai:aei.pitt.edu:12366
2011-02-15T23:20:12Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
Monetary Policy on the Way Out of the Crisis. Bruegel Policy Contribution 2009/15, December 2009
von Hagen, Jürgen.
fiscal policy
monetary policy
financial crisis 2008-on/reforms/economic governance
Senior Non-Resident Fellow Jürgen von Hagen offers his recommendations for the proper monetary policy to lead the eurozone out of the crisis. He argues that the tentative recovery in the euro area indicates that both monetary and fiscal policy can be normalised soon. However, because delaying fiscal consolidation would result in greater debt burdens whereas monetary policy can be quickly adjusted to respond to unforeseen developments, there is less risk involved if a fiscal exit comes first. In any case, the two strategies must be coordinated and the European Central Bank must be very clear on its interest rate policies. This paper was prepared as part of testimony for the European Parliament's Economic and Monetary Affairs Committee.
2009-12
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/12366/1/pc_monpolicy_171209.pdf
von Hagen, Jürgen. (2009) Monetary Policy on the Way Out of the Crisis. Bruegel Policy Contribution 2009/15, December 2009. [Policy Paper]
http://aei.pitt.edu/12366/
oai:aei.pitt.edu:14460
2011-02-15T23:33:49Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D46:46303032
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
A century of macroeconomic and monetary thought at the National Bank of Belgium. Nation Bank of Belgium Working Paper, No. 188, April 2010
Maes, Ivo.
Belgium
monetary policy
EMU/EMS/euro
"A century of macroeconomic and monetary thought at the National Bank of Belgium" traces the history of economic research at the National Bank of Belgium, from the early decades of the 20th century to its present functioning in the Eurosystem. The study also goes into the major economic policy debates, as well as the specific lines of macroeconomic and monetary thinking at the National Bank of Belgium. The focus is very much on the role of the Research Department in policymaking and its dialogue (and debates) with the academic community.
2010-04
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/14460/1/wp188En.pdf
Maes, Ivo. (2010) A century of macroeconomic and monetary thought at the National Bank of Belgium. Nation Bank of Belgium Working Paper, No. 188, April 2010. [Working Paper]
http://aei.pitt.edu/14460/
oai:aei.pitt.edu:14461
2011-02-15T23:33:50Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303032:44303032696E7465726E6174696F6E616C65636F6E6F6D79
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303035:44303035303039
74797065733D776F726B696E677061706572
The development of monetary policy in the 20th century - some reflections. National Bank of Belgium Working Paper, No. 186, April 2010
Issing, Otmar.
international economy
European Central Bank
monetary policy
EMU/EMS/euro
In this paper I outline – from a practitioner's as well as from a researcher's perspective – several of the key developments that took place during the last century in monetary policy. In particular, I describe how the monetary system evolved from gold standard, prevailing throughout most of the last century, to paper money and how the norm in central banking changed from pure discretion after World War II to transparency and independence. I furthermore analyze how the exchange rate regime under Bretton-Woods impacted on countries’ monetary policy and, with a focus on Europe, how European Monetary Union (EMU) emerged from the European Monetary System (EMS). I then outline today’s relatively broad consensus on monetary policy and how it developed from a learning process on the side of central banks and important contributions from research. Finally, after arguing that the ECB's monetary policy which fruitfully combines past experience and current research is a successful and promising approach, I outline some challenges lying ahead.
2010-04
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/14461/1/wp186En.pdf
Issing, Otmar. (2010) The development of monetary policy in the 20th century - some reflections. National Bank of Belgium Working Paper, No. 186, April 2010. [Working Paper]
http://aei.pitt.edu/14461/
oai:aei.pitt.edu:14519
2011-02-15T23:34:15Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153696E676C654D61726B6574:65666153696E676C654D61726B65746361706974616C676F6F64737365727669636573
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303035:44303035303039
74797065733D706F6C6963797061706572
Lessons for Europe from the 1930s. CEPS Commentaries, 21 January 2010
De Grauwe, Paul.
monetary policy
capital, goods, services, workers
European Central Bank
financial crisis 2008-on/reforms/economic governance
Present-day central banks did not repeat the mistakes of the 1930s by tightening money in the face of a banking crisis, or by desperately trying to balance their books when the economy crashed. Yet there is one area of policy-making where authorities may not have learned the lessons of history, and are in the process of repeating the same mistakes, argues Paul De Grauwe, Senior Research Fellow at CEPS. Ultimately a central bank has to make choices. The Federal Reserve and the Bank of England chose massive programmes of liquidity creation, attaching a low weight to the possible inflationary consequences of their actions. The ECB has been more conservative in its liquidity creating programmes; attaching a low weight to the consequences for the exchange rate and to the chances of a quick recovery. Only time will tell us which of these choices was right.
2010-01
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/14519/1/Jan_PDG_on_strength_of_euro.pdf
De Grauwe, Paul. (2010) Lessons for Europe from the 1930s. CEPS Commentaries, 21 January 2010. [Policy Paper]
http://aei.pitt.edu/14519/
oai:aei.pitt.edu:15123
2016-01-30T17:22:51Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D706F6C6963797061706572
A European mechanism for sovereign debt crisis resolution: a proposal. Bruegel Blueprint Series, 9 November 2010
Gianviti, Francois
Krueger, Anne O.
Pisani-Ferry, Jean
Sapir, Andre
Hagen, Jurgen Von.
monetary policy
financial crisis 2008-on/reforms/economic governance
This Bruegel Blueprint argues that Europe should take the lead in defining a solution to the problem of excessive public debts and create a European Crisis Resolution Mechanism (ECRM).The authors, Francois Gianviti, Anne O. Krueger, Jean Pisani-Ferry, Andre Sapir and Jürgen von Hagen, present the rationale for such a mechanism in the euro area and details of how an ECRM would work. The ECRM would be a permanent tool to deal with sovereign debt crises in an effective and predictable way.
2010-11
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/15123/1/101109_BP_Debt_resolution_BP_clean_01.pdf
Gianviti, Francois and Krueger, Anne O. and Pisani-Ferry, Jean and Sapir, Andre and Hagen, Jurgen Von. (2010) A European mechanism for sovereign debt crisis resolution: a proposal. Bruegel Blueprint Series, 9 November 2010. [Policy Paper]
http://aei.pitt.edu/15123/
oai:aei.pitt.edu:15130
2011-02-15T23:38:34Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D706F6C6963797061706572
The EU should harness domestic politics, not fines, to bring deficits into line. CEPS Commentaries, 28 October 2010
Bruton, John.
financial crisis 2008-on/reforms/economic governance
monetary policy
This Commentary identifies several key weaknesses and oversights implicit in the proposals on the table at the October 2010 European Council summit to discipline EU member states whose governments exceed EU deficit or debt limits. As a more effective alternative, the author proposes enlisting the power of opposition parties and the bond markets curb such excesses.
2010-10
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/15130/1/Oct_Bruton_on_Deauville.pdf
Bruton, John. (2010) The EU should harness domestic politics, not fines, to bring deficits into line. CEPS Commentaries, 28 October 2010. [Policy Paper]
http://aei.pitt.edu/15130/
oai:aei.pitt.edu:15184
2016-01-30T17:22:07Z
7374617475733D707562
7375626A656374733D44:44303032:44303032303232
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303032:44303032303230
7375626A656374733D44:44303032:44303032303035
7375626A656374733D44:44303032:44303032303136
7375626A656374733D44:44303032:44303032303130
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153696E676C654D61726B6574:65666153696E676C654D61726B65746361706974616C676F6F64737365727669636573
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
Whither growth in Central and Eastern Europe? Policy lessons for an integrated Europe. Bruegel Blueprint Series No. 11, November 2010
Becker, Torbjorn
Daianu, Daniel
Darvas, Zsolt
Gligorov, Vladimir
Landesmann, Michael
Petrovic, Pavle
Pisani-Ferry, Jean
Rosati, Dariusz
Sapir, Andre
Weder di Mauro, Beatrice.
EU-South-Eastern Europe (Balkans)
monetary policy
fiscal policy
capital, goods, services, workers
regionalism, international
EU-Central and Eastern Europe
financial crisis 2008-on/reforms/economic governance
EU-Latin America
EMU/EMS/euro
EU-Asia-general
This report examines the impact of the economic crisis on the countries of central and eastern Europe (CESEE) and draws out the main policy lessons. Until the crisis hit, CESEE countries had been pursuing a distinctive model of growth and catch-up through integration with the European Union, although not all countries had achieved the same level of integration with the EU. The crisis was a major challenge for the policies pursued in many CESEE countries, and the region was hit by the crisis much harder than other parts of the emerging world, and is also recovering more slowly. In chapter 1, we compare the pre-crisis development model of the central, eastern and south-eastern Europe (CESEE) region with similar countries in Asia and Latin America and study the impact of the crisis. We highlight that the CESEE growth model was fundamentally different from models in other emerging country regions, but also that it had two variants. The first, which characterised most central European countries, was by and large appropriate and sustainable. But there is a second group of CESEE countries (we call it the Baltic-Balkan group) in which the same overall growth model led to widespread misallocation of resources and unsustainable growth trajectories. These countries are undergoing a much more painful recovery from the crisis. In chapter 2 we scrutinise more closely the growth model of the region. We study the short-run challenges and the medium- to longer-run issues, focusing on behavioural adjustments occurring within the countries of the region in the wake of the crisis and on changes in the external environment. We discuss policy issues to make the re-oriented growth model sustainable and successful. Chapters 3, 4 and 5 examine three key policy areas: exchange-rate policy, financial stability and fiscal sustainability. We identify a strong role for exchange-rate policy both in the unsustainable pre-crisis developments of a number of countries and in their dramatic response to the crisis. However, concerning the other two main policy areas, it is true more generally that even more conservative domestic financial regulation and supervision and fiscal policy could not have crisis-proofed those CESEE countries which, even before the crisis, had double-digit current-account deficits. Looking forward, improving supply side conditions and competitiveness will be a key challenge for most countries in the region. Massive cross-border holdings in CESEE banks pose significant challenges to financial regulation and we highlight a large number of unresolved issues, while for fiscal sustainability we are cautiously optimistic, but certainly more optimistic than most analysts who call for overly strict, and hence pro-cyclical, fiscal policy. In our concluding chapter 6, we raise policy issues for the CESEE countries and the EU. The general conclusion is that the benefits of EU integration for countries that are catching up are conditional on the quality of national policies and of the EU framework itself. In both respects we point out past failings and suggest strategic improvements. Reorienting the growth model in those countries that entered a shunt-line before the crisis will be hard because of their legacies, but that there is no other path to follow in order to make the EU’s eastern enlargement a lasting economic success story.
2010-11
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/15184/1/101124_bp_zd_whither_growth.pdf
Becker, Torbjorn and Daianu, Daniel and Darvas, Zsolt and Gligorov, Vladimir and Landesmann, Michael and Petrovic, Pavle and Pisani-Ferry, Jean and Rosati, Dariusz and Sapir, Andre and Weder di Mauro, Beatrice. (2010) Whither growth in Central and Eastern Europe? Policy lessons for an integrated Europe. Bruegel Blueprint Series No. 11, November 2010. [Policy Paper]
http://aei.pitt.edu/15184/
oai:aei.pitt.edu:15441
2011-02-15T23:40:50Z
7374617475733D707562
7375626A656374733D44:44303032:44303032696E7465726E6174696F6E616C65636F6E6F6D79
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D706F6C6963797061706572
The threat of currency wars: a European perspective. Bruegel Policy Contribution 2010/12, December 2010
Darvas, Zsolt
Pisani-Ferry, Jean.
international economy
monetary policy
This Policy Contribution was prepared as a briefing paper for the European Parliament Economic and Monetary Affairs Committee’s Monetary Dialogue, entitled ‘The threat of 'currency wars': global imbalances and their effect on currencies,' held on 30 November 2010. Bruegel Fellows Jean Pisani-Ferry and Zsolt Darvas argue the so-called 'currency war' is manifested in three ways: 1) the inflexible pegs of undervalued currencies; 2) attempts by floating exchange-rate countries to resist currency appreciation; 3) quantitative easing. Europe should primarily be concerned about the first issue, which relates to the renewed debate about the international monetary system. The attempts of floating exchange-rate countries to resist currency appreciation are generally justified while China retains a peg. Quantitative easing cannot be deemed a 'beggar-thy-neighbour' policy as long as the Fed’s policy is geared towards price stability. Central banks should come to an agreement about the definition of price stability at a time of deflationary pressures, as current US inflationary expectations are at historically low levels. Finally, the exchange rate of the Euro has not been greatly impacted by the recent currency war; the euro continues to be overvalued, but less than before.
2010-12
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/15441/1/101213_pc_zd_jpf_the_threat_of_currency_wars_a_european_perspective.pdf
Darvas, Zsolt and Pisani-Ferry, Jean. (2010) The threat of currency wars: a European perspective. Bruegel Policy Contribution 2010/12, December 2010. [Policy Paper]
http://aei.pitt.edu/15441/
oai:aei.pitt.edu:15473
2011-02-15T23:41:02Z
7374617475733D707562
7375626A656374733D46:466A6170616E
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D706F6C6963797061706572
Who is afraid of a Japanese decade? CEPS Commentary, 19 January 2011
Gros, Daniel.
monetary policy
Japan
financial crisis 2008-on/reforms/economic governance
For the second time in a decade, central banks around the world have responded to the collapse of an asset bubble by moving aggressively to ease monetary policy, a tactic explicitly justified by the need to avoid a Japanese-style 'lost decade'. The problem, however; as argued in this Commentary, is that Japan never lost a decade…
2010-01
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/15473/1/Jan_DG_on_Myth_of_a_Japanese_Decade.pdf
Gros, Daniel. (2010) Who is afraid of a Japanese decade? CEPS Commentary, 19 January 2011. [Policy Paper]
http://aei.pitt.edu/15473/
oai:aei.pitt.edu:15765
2011-02-15T23:42:50Z
7374617475733D707562
7375626A656374733D44:44303032:44303032303035
7375626A656374733D44:44303032:44303032303130
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D776F726B696E677061706572
The fiscal and monetary institutions of CESEE countries. Bruegel Working Paper 2011/02, February 2011
Darvas, Zsolt
Kostyleva, Valentina.
EU-South-Eastern Europe (Balkans)
monetary policy
fiscal policy
EU-Central and Eastern Europe
financial crisis 2008-on/reforms/economic governance
This working paper by Zsolt Darvas and Valentina Kostyleva examines the role of fiscal and monetary institutions in macroeconomic stability and budgetary control in CESEE (central, eastern and south eastern European) countries in comparison to other OECD countries. Budgetary discipline indexes suggest that fiscal institutions are weaker in most CESEE countries than in non-CESEE OECD countries. these factors call for improved monetary institutions, stronger fiscal rules, and better budgetary procedures.
2011-02
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/15765/1/Zsolt_Darvas_WP_2011_02%2D2.pdf
Darvas, Zsolt and Kostyleva, Valentina. (2011) The fiscal and monetary institutions of CESEE countries. Bruegel Working Paper 2011/02, February 2011. [Working Paper]
http://aei.pitt.edu/15765/
oai:aei.pitt.edu:29761
2011-02-23T02:22:43Z
7374617475733D707562
7375626A656374733D44:44303031:44303031303138:656C6D656D706C6F796D656E74756E656D706C6F796D656E74
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
74797065733D776F726B696E677061706572
The Taylor principle and (in-) determinancy in a New Keynesian model with hiring frictions and skill loss. NBB Working Paper No. 208, November 2010
Rannenberg., Ansgar
monetary policy
employment/unemployment
We introduce skill decay during unemployment into Blanchard and Gali's (2008) New- Keynesian model with hiring frictions and real-wage rigidity. Plausible values of quarterly skill decay and real-wage rigidity turn the long-run marginal cost-unemployment relationship positive in a "European" labour market with little hiring but not in a fluid "American" one. If the marginal cost-unemployment relationship is positive, determinacy requires a passive response to inflation in the central bank's interest feedback rule if the rule features only inflation. Targeting steady state output or unemployment helps to restore determinacy. Under indeterminacy, an adverse sunspot shock increases unemployment extremely persistently.
2010-11
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/29761/1/wp208En.pdf
http://www.nbb.be/doc/ts/publications/wp/wp208En.pdf
Rannenberg., Ansgar (2010) The Taylor principle and (in-) determinancy in a New Keynesian model with hiring frictions and skill loss. NBB Working Paper No. 208, November 2010. [Working Paper]
http://aei.pitt.edu/29761/
oai:aei.pitt.edu:29763
2011-02-23T02:17:01Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303035:44303035303039
74797065733D776F726B696E677061706572
Estimating monetary policy reaction functions: a discrete choice approach. NBB Working Paper No. 210, February 2011
Boeckx., Jef
European Central Bank
monetary policy
I propose a discrete choice method for estimating monetary policy reaction functions based on research by Hu and Phillips (2004). This method distinguishes between determining the underlying desired rate which drives policy rate changes and actually implementing interest rate changes. The method is applied to ECB rate setting between 1999 and 2010 by estimating a forward-looking Taylor rule on a monthly basis using real-time data drawn from the Survey of Professional Forecasters. All parameters are estimated significantly and with the expected sign. Including the period of financial turmoil in the sample delivers a less aggressive policy rule as the ECB was constrained by the lower bound on nominal interest rates. The ECB's non-standard measures helped to circumvent that constraint on monetary policy, however. For the pre-turmoil sample, the discrete choice model's estimated desired policy rate is more aggressive and less gradual than least squares estimates of the same rule specification. This is explained by the fact that the discrete choice model takes account of the fact that central banks change interest rates by discrete amounts. An advantage of using discrete choice models is that probabilities are attached to the different outcomes of every interest rate setting meeting. These probabilities correlate fairly well with the probabilities derived from surveys among commercial bank economists.
2011-02
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/29763/1/wp210En.pdf
http://www.nbb.be/doc/ts/publications/wp/wp210En.pdf
Boeckx., Jef (2011) Estimating monetary policy reaction functions: a discrete choice approach. NBB Working Paper No. 210, February 2011. [Working Paper]
http://aei.pitt.edu/29763/
oai:aei.pitt.edu:29778
2011-02-23T00:54:58Z
7374617475733D707562
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A macroeconomic assessment of the European Monetary Union. EUMA Paper Vol. 7, No. 5, April 2010
Wang., Qin
EMU/EMS/euro
monetary policy
Since the inception of Euro in 1999, a single currency and the Economic and Monetary Union (EMU) have past more than ten years. By and large, stepping into EMU represents one of the key aspects of EU’s successful integration. For most of its short life, the European Union has been driven mainly by the goal of economic integration. From a limited experiment in economic cooperation during the early 1950s, boarded in the 1960s to become a custom union, wrestled during the 1970s with attempts to build common economic policies and exchange rate stability, focused on completing the single market during the late 1980s, to the Economic and Monetary union and a single currency at the present1, the European Union has followed a tortuous path. The paper starts with the effectiveness of EU’s monetary policy after the birth of Euro to explore the complex relationship between monetary policy and economic operation within the European Union.
2010-04
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/29778/1/WangMacroeconAssessmEUediEUMA.pdf
http://www6.miami.edu/eucenter/
Wang., Qin (2010) A macroeconomic assessment of the European Monetary Union. EUMA Paper Vol. 7, No. 5, April 2010. [Policy Paper]
http://aei.pitt.edu/29778/metadataPrefix%3Doai_dc%26offset%3D29779%26set%3D7375626A656374733D44%253A44303031%253A65636F6E6F6D696366696E616E6369616C61666661697273%253A6566616D6F6E6574617279706F6C696379