This paper investigates the relationship between oil prices and the global economy. In modelling this relationship, a new approach is proposed in which we introduce the use of a factor error correction model to compress data from the largest developed and developing economies. An important...

In this paper we examine the channels through which innovations to policy variables— policy rates or monetary aggregates—affect such macroeconomic variables as output and inflation in Sri Lanka. The effectiveness of monetary policy instruments is judged through the prism of...

Financial stability is important for any economy regardless of its degree of development, because with the help of financial institutions main activities can be carried out for all economic sectors. So, the crisis of the financial system can lead to economic bottlenecks, direct losses, and...

Article devoted to the problems of increasing the efficiency of financial intermediation in the context of provision of non-inflationary monetization of economy. As the recent global financial and economic crisis showed, the dilemma between the provision of the economy with sufficient money...

In this paper we introduce a global factor-augmented error correction model to quantify the interaction of oil price with the global economy. Global factors are constructed for global oil price and global interest rate, money, real output and inflation over 1999-2012. The global factors are...