The literature on currency crisis has generally not answered to the following question: which economic policies may reduce the contagion effects of a speculative shock? We use a dynamic Mundell-Fleming model extended to four countries and compute three time-consistent equilibria: a Nash...

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Stability-oriented European institutions correspond to the general prescriptions of the ‘new macroeconomics consensus’. This contribution provides an assessment of the pros and cons of these institutions in terms of macro stabilisation and exchange-rate swings drawing on different scenarios....

According to the fiscal theory of the price level (FTPL), the interactions between monetary and fiscal policies with governments facing the possibility to act in a non-Ricardian manner make the general price level be fully determined. Here, depending on the expectations framework, we show to...

La théorie budgétaire du niveau des prix, soit en anglais la Fiscal Theory of the Price Level, (FTPL), a donné lieu à une intense littérature dans les années récentes1 (Leeper [1991], Sims [1994], Woodford [1994, 1995, 1996, 1998, 1999 et 2000], Canzoneri et alii [1998], Cochrane [1999,...

The purpose of this note is to compare the characteristics of the actual Stability and Growth Pact with that of a European “modified golden rule”. The latter would consist in achieving in each EU country a cyclically-adjusted net-of-public-investment balance. The benchmark for comparison is...

The “fiscal theory of the price level” (FTPL; Woodford, 1995 and 2001) marks the revival of interest for fiscal policy, after the long blackout that followed the crisis of Keynesian economics. Among the causes of this revival, an important role was played by the dramatic drop in US public...

We use a structural VAR model with short-term restrictions to investigate the relative importance of interest rate, exchange rate and credit channels in the monetary policy transmission (MPT) for the Czech Republic, Hungary and Poland over 1993:1-2004:3. Main results are as follows. First, in...

This paper uses a SVAR methodology to investigate the effects of public investment on growth, and more specifically, the effects of the introduction of a golden rule. We extend the existing literature by estimating a model of the British economy that takes into account long run factors. This...

In this paper, we develop an analysis of the reasons for the apparent failure of the “Lisbon strategy” (2000) so far. After having made the general case for a comprehensive “institutionalist perspective” on the European economy, we first try to formalise the objectives of “Lisbon” in...