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This paper tackles two established puzzles in international macroeconomics literature. The first is the lack of systematic difference in the macroeconomic performance across exchange rate regimes. The second is the absence of a clear empirical relationship between macroeconomic performance and capital-account liberalization. We suggest that both may appear(More)
In this paper we formalize budgetary stabilisers as a set of simple policy rules, and assess their operation in an uncertain environment by performing stochastic simulations in a forward-looking multi-country macroeconometric model, NiGEM, comprising individual blocks for 10 Euroland economies. Automatic stabilisers make output volatility decrease by 11 per(More)
Taylor and others have argued that model stability requires interest rate policy rules have an inflation feedback parameter greater than one. In this paper we build an encompassing framework to analyse the stability conditions of various policy rules on Taylor’s model and in a world where there are nominal rigidities in the short-term evolution of demand.(More)
Given the increase in world economic integration we wish to examine whether there is a case for coordinating monetary policy across some of the major economies. In late 1998 and early 1999, US monetary policy responded to global economic conditions and interest rates were cut in response to the crisis in Asia. But Europe could have also played an important(More)
We examine whether there is a case for coordinating monetary policy reactions across major economies. We undertake stochastic simulations on the National Institute’s Global Ž . Econometric Model NiGEM , to evaluate independently set monetary policy where domestic considerations remain the prime objective and we compare outcomes to a regime with a(More)
Differences in economic structures across countries have potentially important implications for the conduct of monetary policy in the Euro Area. One facet of this lies in consumer expenditure behaviour. Our objective is to analyse the policy implications of assuming maximal and minimal differences between European economies using the empirical(More)
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