The countercyclical monetary policy is a policy that economists recommend to adopt in order to slow down the economic fluctuations. The aim of this study is to address the question that, in the presence of fiscal dominance and considering institutional quality (IQL), what the optimal monetary policy should be during the business cycles? To find the appropriate answer, first, in the framework of...

This study captures regime-switching, monetary policy responses to financial market disturbances in Canada. Monetary policy is identified within a nonlinear, structural VAR framework with a regime-switching policy block that allows for contemporaneous policy reactions in a small open economy. The key finding is that monetary policy in Canada has undergone important changes in monetary policy re...

india has experienced persistently high inflation in recent years, despite a period of below-trend economic growth. As a result, controlling inflation has become a key objective for policymakers. The two main indicators of inflation in india are the wholesale price index (Wpi) and the consumer price index (cpi). Although the Wpi has traditionally been the most widely used measure for assessing ...

The assumption is that expansionary monetary policy good for reducing unemployment, and vice versa. In this context, the status of defined, which called conditions. For this, IFIS Financial Conditions Index published by Institute Economics, Zagreb, was used as a synthetic indicator state numerous variables (27 variables). By analysing movements restrictive conditions presented index unemploymen...

Abstract While all EU Member States can join the group's monetary union, euro area, some members are far more ready for adoption and use of single European currency. Here, we construct a new Monetary Union Readiness Index (MURI) States. The theoretical framework index is built on economic theory Optimal Currency Areas regulations such as Treaty Maastricht criteria, Regulation Macroeconomic Imba...

In this paper the optimal choice of a monetary target is investigated for a small open economy that is subject to foreign monetary policy shocks. In contrast to large parts of the literature, pegging the exchange rate is never the best policy choice for the small open economy in our model. Instead, monetary targeting and, depending on the parameter combination, producer price index targeting co...

Data from a unique monetary ‘experiment’ conducted in the UK during the period 1994-97 are used to investigate the cost of political intervention in monetary policy. The paper finds that the difference between government bond yields in Germany (but not the US) and the UK was systematically related to an index of the credibility of monetary policy constructed on the basis of the frequency of agr...