We revisit the factors of convergence and growth in Central, Eastern and South Eastern Europe (CESEE). While the key elements that were driving pre-crisis convergence - rapid export growth, propelled by low wages, capital inflows and technology import, and catalysed by the EU accession - gave a...

We test the determinacy properties of the standard and financial-sector-augmented Taylor rules in a new Keynesian model with a presence of banking activities. We extend the basic fully rational environment to the setting with heterogeneous expectations. We observe that the benefits from extra...