Abstract Generally, one of the important issues related to currency crises is output losses caused by these phenomena. In this study, determinants and particularly role central bank will be evaluated during crises. Moreover, paper tries investigate roles macroeconomic variables also monetary, fiscal exchange rate policies on regard, an econometric model with panel data has been used for emergin...

This paper explores how sensitive is monetary policy to the precise preferences of the central bank over inflation and economic activity. It does so in order to address a puzzle—which is that the U.S. Fed and the Bank of England appear to have quite different objectives and yet have adopted strikingly similar policies in recent years. I use a calibrated model to assess how policy might be sensi...

Despite the increasing number of studies on monetary policy uncertainty, its role on the strategic interaction between fiscal and monetary policies has not been fully explored. Our paper aims to fill this gap by evaluating the consequences produced by multiplicative uncertainty in such a context. J.E.L. Classification: E61, E63.

We study the optimal monetary policy in a two-country open-economy model under two monetary arrangements: (a) multiple currencies controlled by independent policy makers; (b) common currencies with a centralized policy maker. Our findings suggest that: (i) Monetary policy competition leads to higher long-term inflation and interest rates with large welfare losses; (ii) The inflation bias and th...

The global economy is in turmoil. In this scenario, monetary policies around the world face strong challenges. Sailing through quiet waters has been pleasant. As we know, the stable and prosperous performance of the world economy in recent years has partly been the result of sound monetary policies. Now, during difficult times, monetary policy should contribute to make the adjustment less costl...

This paper examines the design of macroeconomic policies after the enlargement of the EU by Central and Eastern European countries (CEECs). We consider scenarios with and without CEECs being members of the European Economic and Monetary Union (EMU). For the European Central Bank, we analyze consequences of monetary versus inflation targeting. For European fiscal policies, we assume that the gov...

The interaction between fiscal and monetary policy is analyzed by means of a game theoretical approach. The coordination between those two policies is essential, since decisions taken by one institution may have disastrous effects on the other one, resulting in welfare loss for the society. We derived optimal monetary and fiscal policies in context of three coordination schemes: when each insti...

I characterize a large family of monetary policies that implement Milton Friedman’s prescription of zero nominal interest rates in a monetary search economy with multiple assets and aggregate uncertainty. This family of optimal policies is defined by two properties: (i) the money supply must be arbitrarily close to zero for an infinite number of dates, and (ii) asymptotically, on average (over ...

T his paper investigates the impact of monetary policies on the exchange rate of selected developing countries during the period 2001-2010. For this purpose, in addition to the theoretical explanation, dynamic panel data based on the generalized method of moments (GMM) have been used to estimate the model. Our findings indicate that the lag of exchange rate variable has a positive and signific...