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Abstract: In this paper it was studied the cyclical and structural convergence between Romanian and Euro Zone''s economies in a Minnesota Priors framework. For this purpose we called the Bayesian econometrics to estimate a Structural Vector Autoregression model SVAR with Gibbs Sampling. The methodological framework called in this paper is proposed by experts from the Federal Reserve Bank of Minnesota and from here the name of Minnesota Prior where a priori were introduced the hypothesis that endogenous variables follow different forms of a Markov first order autoregressive model, namely a Random Walk or an AR model. Focusing here especially on consumption cycles and using the relations provided by the theory, I was intended in study the asymmetries between supply and demand shocks in the case of Romanian and Euro Area economies. A higher correlation of shocks between the two studied economies indicates a structural similarity. In addition, for this purpose I involved several methods to ensure robustness checks in regard with the correlation of the two types of structural shocks. [Copyright &y& Elsevier]

This paper presents a reappraisal of the international origins of the Federal Reserve Act of 1913. The most comprehensive study on the subject up to date is a book by J. Lawrence Broz. While Broz is correct to emphasize the impact of international trends in shaping the final text of the act, his account remains incomplete. The primary reason for this is that the narrative cannot account for the following puzzle: Why would Wall Street bankers fight vehemently during the fall of 1913 (an unimportant, "black box" period in Broz's account) against a proposal that was supposed to be in their best interest? A possible explanation should focus on President Wilson's policy entrepreneurship and strategic policy vision - both foreign and domestic . This paper demonstrates that the introduction of an autonomous presidency to the verbal model goes a long way toward explicating the puzzles that occurred during the "black box" period left out of Broz's narrative. [ABSTRACT FROM AUTHOR]

Abstract: This paper examines the interaction between monetary policy and financial stability and provides an assessment of the implications of banks’ risk management practices for monetary policy. By considering the desire of the central bank to stabilize different types of the “basis” risk as a contribution to financial stability, we derive a set of plausible interest-rate rules characterized by either backward or forward interest-rate smoothing. The paper investigates the determinacy conditions of the rational expectations equilibria obtained under such rules. Contrary to what previously found in the literature, we find that the practice of smoothing interest rates backward does not in general alleviate problems of equilibrium indeterminacy. Moreover, basis risk stabilization may lead to policy rules embedding “forward” interest-rate smoothing, where a new kind of indeterminacy may arise following excessive concern for financial stability. [Copyright &y& Elsevier]

The central bank is the highest monetary authority within each monetary system. This is why the concern for the responsibilities, objectives and functions of central banks is present in the general economy field, as well as in those of finance, currency or financial exchange relations. Therefore, a contrasted analysis between the Eurosystem, the Federal Reserve and the Bank of Japan is of general interest for the users. The paper presents a comparison between the three systems. The status and objective differences are presented with a reference to the historical circumstances that have generated national characteristics. In the past years, due to the fact that all the three authorities have made directional changes towards independence and transparency, and because the economies of these areas are mainly convergent, a diminution of the differences between the three monetary authorities can be observed. [ABSTRACT FROM AUTHOR]

The article explores the causes of price inflation and deflation. It notes that the terms deflation and inflation do not refer to a single price level but to an array of prices for all goods and services in the market. The massive expansion of the monetary base initiated by the Federal Reserve in response to the financial crises is also highlighted.