Using stochastic simulations, this paper analyses the probability distribution of a country's deficit ratio under fixed exchange rates and a variety of monetary policy rules. The purpose is to show how the probability of getting an "excessive deficit", defined as a deficit / GDP ratio in excess...

Fiscal policy in Britain has changed radically since the Keynesianism of the 1960s and 1970s. After a passive period under monetarism of the 1980s, fiscal policy is said to have adopted a leadership role with long term objectives (low debt, the provision of public services/ investment, and...

This paper surveys and motivates the reasons for incorporating explicit long run of supply features into applied estimated macro economic models. It defines some basic stability conditions for such models and illustrates elements of long run considerations with reference to a small (22 equation)...

In this paper the relationship between the growth of real GDP components is explored in the requency domain using both static and dynamic wavelet analysis. This analysis is carried out separately for the US and UK using quarterly data, and the results are found to be substantially different for...

Most people accept that structural and labour market reforms are needed in Europe. However few have been undertaken. The usual conjecture is that reforms are costly in economic performance and costly to finance. Blanchard and Giavazzi (2003) and Spector (2004) develop a general equilibrium model...

This paper does two things. First it examines the use of real time inter-annual cash data and the role of early interventions for improving the monitoring of national fiscal policies and the correction of fiscal indiscipline. Early warnings are important because they allow us to spread the...

This paper addresses the issue of international payments in a stock-flow framework, by capturing the interaction between the current account balance and international assets portfolios of domestic and foreign investors. It is argued that the stability of such interaction may be affected by...