In this paper we identify the main determinants of the exchange rate regimes in Central and Eastern European Countries (CEECs). For this purpose, we use an ordered logit model for the official (de jure) and the actual (de facto) exchange rate classifications. We find that trade openness and concentration, inflation differentials, international reserves stocks, and financial conditions are the m...

We investigate which variables have supported growth in the euro area over last 30 years. This is a challenging task due to dimensionality problems: large set of potential determinants, limited data, and prospect that some could be non-stationary. assemble 35 real, financial, monetary, institutional for nine original countries covering period between 1990Q1 2016Q4. Using Weighted-Average Least ...

This paper compares the benefits to Greece, Euro zone and rest of world arising from policies that prevent a Greek default exit with costs preventive policies. It concludes exceed costs, though unpredictable politics nationalist aspirations may adoption rational The also considers causes Greece’s problems: failure lenders ask for proper risk premium on country’s bonds; publication false economi...

â â â â â  abstract: â  as the number of independent countries increases and their economies become more integrated, we would expect to observe more multi-country currency ::::union::::s. this paper explores the pros and cons for different countries to adopt as an anchor the us dollar, the euro or the yen. in addition, it addresses the question of how co-movement of outputs and prices would res...

What explains the central role of dollar in world trade? Will US currency retain its dominant status future? This paper develops a quantitative general equilibrium framework with endogenous choice that can address these questions. Complementarities price setting and input-output linkages across firms generate complementarities making exporters coordinate on same invoicing. The is more likely to...

A model of a dependent central bank that internalizes the government’s budget constraint is used to examine the optimal composition of the euro zone. The model embodies the desire to stimulate output and to provide monetary financing to governments. Unable to pre-commit to first-best policies, the central bank produces excess inflation — a tendency partially reduced in a monetary union. On the ...

How much should we expect monetary integration to reduce differences among participating economies? Using data for the 50 U.S. states over 1929–1999, the paper finds that large differences across states persist in both business-cycle variability and correlations of state income with the U.S. as a whole. It is also shown that about a third of a state’s business-cycle volatility is explained by i...

The paper examines the transmission mechanism of monetary policy in an open economy with and without a binding zero bound on nominal interest rates. In particular, a foolproof way of escaping from a liquidity trap is suggested, consisting of a price-level target path, a devaluation of the currency and a temporary exchange rate peg, which is later abandoned in favor of price-level or in‡ation ta...

This paperÕs estimates and tests of Fed intervention pro®ts are the ®rst that explicitly adjust for foreign-exchange risk premia; failure to adjust may grossly a€ect estimated pro®ts. Pro®ts appear economically and statistically signi®cant, whether risk premia are modeled as time-constant or as appreciationÕs market beta depending on Fed intervention. The estimates are sensitive to the method o...