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In recent years, the global economy has been hit by a sequence of severe shocks that affected the two largest economies, the USA and the Euro Area, severely. Uncertainties about the future abound. While the challenges are similar for both economies and the policy tools resemble each other, they apply to different economic landscapes. What can they learn from each other? This paper looks at the basic structural facts, the nature of uncertainty shocks, and the efficiency of policy tools in the two economies. The key to understanding recent developments is uncertainty. This paper argues that the channel through which uncertainty influences inflation, wage cost, and unemployment is the markup firms charge to cover their cost of capital. While the measurements of uncertainty are uncertain, adding a proxy for uncertainty can improve the estimates of the basic New Keynesian model. The Federal Reserve Bank has been more successful because it operates in a more integrated capital market. In the Euro Area, uncertainty is higher than in the US and this could make disinflation in Europe more painful in terms of unemployment. [ABSTRACT FROM AUTHOR]

This study aims to evaluate the impact of major and minor changes in the Euro Zone and US interest rates on the EUR/USD exchange rate between 1 January 1999 and 31 December 2020. Therefore, twelve events are analyzed in this period, five related to changes in the US interest rate, six related to changes in the European interest rate, and finally, a single event in which both interest rates undergo an equal variation on the same date. The event study methodology was used, which, through the calculation of abnormal returns, makes it possible to evaluate whether there was a repercussion of the events on the value of the EUR/USD exchange rate. This methodology is used in several studies related to capital markets. The obtained results prove that there are abnormal returns with statistical significance on the event days, and, on the days that follow, changes in the interest rates have an impact on the EUR/USD exchange rate; however, there is no clear direction of the asset after the events occur. [ABSTRACT FROM AUTHOR]

In this study, it is aimed to determine the relationships and interactions between the Dollar Index and the Major World Indices (BIST 100, DAX, Dow Jones, S&P 500, Nikkei 225, FTSE 100, Euro Stoxx 50) and whether the Dollar Index can be an international financial indicator. Relationships between seven major world indices and dollar indices examined in the study were examined by granger causality test; While there is no causality relationship between the BIST 100, Dow Jones, and S&P 500 indices towards the Dollar Index, a one-way causality relation has been determined from the Dollar Index to these indices. A bidirectional and reciprocal causality relationship was determined between the DAX, Euro Stoxx 50, FTSE 100 and Nikkei 225 indices with the Dollar Index. It is considered that the findings obtained are mostly compatible with the literature. The Dollar Index, which was created in 1973 and has been used for about 50 years and covers a proportional composition of other important currencies, mainly the US Dollar, is considered to be an important financial and economic indicator today due to the close causality relations and strong correlations between them and the Major World Indices. [ABSTRACT FROM AUTHOR]