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This paper argues that the null or weak response of emerging market currencies to domestic monetary policy documented in the literature is the result of wide event windows. An event study with intraday data for Mexico shows that an unanticipated tightening appreciates the currency and flattens the yield curve, consistent with the evidence for advanced economies. With daily event windows, however, only the yield curve responds to monetary policy. Noise in daily exchange rate returns explains the lack of response of the currency. Such noise gives rise to a bias that declines after controlling for potential omitted variables. [ABSTRACT FROM AUTHOR]

The global financial crisis that started in the U.S. had an immediate spillover to the rest of the world financial markets. Next, a decrease in real economic output throughout the developed world occurred simultaneously with high bailout costs for the salvaging of banks and other financial institutions. This vicious combination was at the core of the bank-sovereign interdependence and the sovereign debt crisis of the eurozone. As early as 2008, the G20 announced a thorough global reform agenda with an aim to tackle the root causes of the crises and to transform the system of global financial regulation. Some important reform steps have been made; still, more than six years on, the job is not finished. Where are we in terms of global financial reform, and are we close to creating a more secure global financial system significantly less prone to crisis and bailouts with taxpayers' money? [ABSTRACT FROM AUTHOR]

Considered as an axiomatic basis of classical, neoclassical, and monetarist theories, the long-run money neutrality assumption does not always seem to be verified. Indeed, in our view, the money, in the sense of M2, can constitute a long-run channel of growth transmission. Thus, this paper examines the long-term relationship among money supply (M2), income (GDP), and prices (CPI). The subprime crisis in 2007 has shown that the demand for money does not only meet motives of transaction, precaution, and speculation but also of fictional or quasi-fictional future demands due to the fact that they are created without real counterparts. The capacity of production systems in developed countries to respond to increases in money supply by creating more wealth, involves the assumption of money neutrality in the long-run. However, in developing countries, the excess of money supply may lead to inflation trends. The present study has confirmed the long-term non-neutrality of money supply in the USA, and its neutrality in Gabon and Morocco. [ABSTRACT FROM AUTHOR]

This article tackles the issue of the transitory effects on growth of prices and the main methods for the calculation of monetary policy relevant inflation in inflation targeting countries. In order to have an indicator which would capture the medium term inflation pressures, several measures of core inflation are considered. Besides that this article mentions the main advantages and disadvantages of the different measures of medium term inflation pressures. Most of the central banks which are implementing the inflation targeting regime are using core inflation indicators based on the exclusion of certain components, however there are several central banks which are using statistical measures of core inflation such as the trimmed mean and weighted median. This article also describes the existing core inflation indicators as well as the main features of the trimmed mean and weighted median for the Republic of Moldova. Even though the obtained indicators of core inflation have different values, they have similar trajectories. [ABSTRACT FROM AUTHOR]

The article discusses in inflation targeting in Colombia from 2002-2012 with a focus on the Central bank of Colombia. Topics include the characteristics of countries using inflation targeting as a means for monetary policy, an overview of the authors' findings using an open economy policy model for the economy of Colombia, and a historical background on Colombia's state before the inflation targeting.

We estimate the Federal Reserve's, the Bank of England's, and the Bank of Japan's responses to house prices. We show that generalized method of moments estimates of a Taylor rule augmented with house prices are biased and dispersed. We then use full-information methods and estimate the policy rule together with a VAR for the nonpolicy variables. These estimates are also biased. We propose an alternative approach and estimate a dynamic stochastic general equilibrium model embedded with a monetary rule with a direct response to house prices. We find that house prices played a separate role in the reaction functions of these central banks. [ABSTRACT FROM AUTHOR]

I characterize optimal monetary and fiscal policy in a stochastic New Keynesian model when nominal interest rates may occasionally hit the zero lower bound. The benevolent policymaker controls the short-term nominal interest rate and the level of government spending. Under discretionary policy, accounting for fiscal stabilization policy eliminates to a large extent the welfare losses associated with the presence of the zero bound. Under commitment, the gains associated with the use of the fiscal policy tool remain modest, even though fiscal stabilization policy is part of the optimal policy mix. [ABSTRACT FROM AUTHOR]

In the past few years there had been numerous debates on the subject of 2008' RON speculative attack. This was leading to many articles and commentaries being written, by both academic specialists and banking experts, all of which focusing on 2008' NBR's monetary policies undertaken actions and their subsequent effects on the local money markets. However, none of these papers was answering to the basic questions of what, how and why really happened on the interbank and money exchange markets those days. We will be emphasizing herewith some insights to these questions. [ABSTRACT FROM AUTHOR]

In this paper, we investigate the comparative properties of empirically estimated monetary models of the U.S. economy using a new database of models designed for such investigations. We focus on three representative models due to Christiano, Eichenbaum, and Evans (2005), Smets and Wouters (2007), and Taylor (1993a). Although these models differ in terms of structure, estimation method, sample period, and data vintage, we find surprisingly similar economic impacts of unanticipated changes in the federal funds rate. However, optimized monetary policy rules differ across models and lack robustness. Model averaging offers an effective strategy for improving the robustness of policy rules. [ABSTRACT FROM AUTHOR]

We show how to construct optimal policy projections in Ramses, the Riksbank's open-economy medium-sized dynamic stochastic general equilibrium model for forecasting and policy analysis. Bayesian estimation of the parameters of the model indicates that they are relatively invariant to alternative policy assumptions and supports our view that the model parameters may be regarded as unaffected by the monetary policy specification. We discuss how monetary policy, and in particular the choice of output gap measure, affects the transmission of shocks. Finally, we use the model to assess the recent Great Recession in the world economy and how its impact on the economic development in Sweden depends on the conduct of monetary policy. This provides an illustration on how Rames incoporates large international spillover effects. [ABSTRACT FROM AUTHOR]

The article offers information on the immunity of foreign central banks in conformance to the Foreign Sovereign Immunities Act of 1976 (FSIA). It discusses the role of central banks in stabilizing currency markets and emergency assistance impacting global economy. It presents several issues raised against the sovereign governments and central banks.

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The Lagos-Wright model--a monetary model in which pairwise meetings alternate in time with a centralized meeting--has been extensively analyzed, but always using particular trading protocols. Here, trading protocols are replaced by two alternative notions of implementability: one that allows only individual defections and one that also allows cooperative defections in meetings. It is shown that the first-best allocation is implementable under the stricter notion without taxation if people are sufficiently patient. And, if people are free to skip the centralized meeting, then lump-sum taxation used to pay interest on money does not enlarge the set of implementable allocations. [ABSTRACT FROM AUTHOR]

We examine the effect of fiscal policy on sovereign risk spreads and investigate whether the interaction of fiscal variables with political institutions affect financial markets. Using panel data from emerging market countries, we find that revenue-based adjustment lowers spreads more than spending-based adjustment. Financial markets also react to the composition of spending. Cuts in current spending lower spreads more than cuts in investment. We show that debt-financed spending increases sovereign risk, while tax-financed spending lowers spreads, suggesting that international investors prefer the latter. Further, we find evidence that financial markets’ reaction to fiscal policy depends on political institutions. [ABSTRACT FROM AUTHOR]

The article presents forecasts on the direction of economic growth for member states of the Organisation for Economic Co-operation and Development (OECD) in 2014. Based on the National Institute Global Econometric Model (NiGEM), the ratios of government debt to gross domestic product (GDP) would be higher in all countries with budget deficit problem. This outlook would be influenced by possible break-up of the Eurozone, monetary policy and the pace of economic growth in emerging economies.

The article presents economic forecasts for the U.S., Canada, Brazil, Japan, China, South Korea and Taiwan, Australia and New Zealand, India, Russia, European Union (EU) countries in 2014. Based on data from the National Institute Global Econometric Model (NiGEM) and National Institute of Economic and Social Research (NEISR), majority of these countries will experience a weakened gross domestic product (GDP) because of indebtedness, monetary and fiscal policies and narrow economic base.