One of key outcomes of open economy macroeconomics refers to a crucial importance of an investment-saving relation affecting a current account determination. However, despite a relative diversity in exchange rate regimes in European transition economies, there is still a substantial potential to...

The causes of the housing bubble are investigated using Granger causality analysis and VAR modeling methods. The study employs the S&P/Case-Shiller aggregate 10 city monthly housing price index, available in the period 1987–2010/8, the 20 city monthly housing price index for 2000–2010/8, and...

A vast body of literature endorses the fact that the changes in the macroeconomic conditions of an economy do impact banks’ performance, simultaneously or with a lag. It is also possible that the feedback effects of bank instability on real economic activity could amplify the fluctuations...

Responsiveness of exchange rates to external price shocks as well as their ability to serve as a traditional vehicle for a transmission of these shocks to domestic prices is affected by exchange rate arrangement adopted by monetary authorities. As a result, exchange rate volatility determines...

Origins and implications of twin deficits occurrence in a large scale of countries seems to be a center of rigorous empirical as well as theoretical investigation for decades. The reality of persisting fiscal and current account deficits became obvious in many advanced as well as advancing,...

European Union member countries are currently exposed to negative implications of the economic and debt crisis. Questions associated with disputable implications of fiscal incentives seem to be contrary to the crucial need of the effective fiscal consolidation that seems to be necessary to...

The relationship between inflation and unemployment was first introduced in 1958 by Phillips who found a negative relationship between unemployment and money wage growth in the UK. However, this relationship appeared to become unstable in many countries over the 1970s. This paper investigates...

This article investigates the dynamics of aggregate wages and prices in the United States (US) and the Euro Area (EA) with a special focus on persistence of real wages, wage and price inflation. The analysis is conducted within a structural vector error-correction model, where the structural...