The introduction of inflation targeting in 2006, together with important economic developments such as dedollarization, marked the beginning of a new macroeconomic framework in Armenia, which is likely to have changed the effectiveness of monetary policy. This paper is the first attempt to...

The paper developes a VAR macrofinance model of the Czech economy. It shows that yield misalignments from the yields implied by the macrofinance model partially determine subsequent yield changes over three to nine months. These yield misalignments tend to persist for a number of months. This...

In this paper we identify some of the main factors behind systemic risk in a set of international large-scale complex banks using the novel CoVaR approach. We find that short-term wholesale funding is a key determinant in triggering systemic risk episodes. In contrast, we find no evidence that a...

This Selected Issues paper for Chile describes the postcrisis recovery experience. The recovery from the 2008–2009 global crisis has been markedly different both among advanced and emerging economies. The steady improvement in the labor wedge-distortions related to the consumption leisure...

The paper evaluates whether a monetary aggregate can serve as a useful predictor of inflation, using recent developments in the principle of cointegrated variables. M2 but not M1 is cointegrated with relevant price, transactions, and rate of return variables. However, deviations of M2 from its...

This paper presents estimates of a demand function for broad money in Japan. The function explains both secular trends in broad money during the 1970s and 1980s and the sharp decline in the income velocity of broad money during 1986-88. The inclusion of wealth and a measure of the return on...

This paper examines monetary concepts and definitions. It notes that approaches to monetary analysis, and the concept of money itself, have been undergoing substantial change in many countries due in large part to recent innovation, which has affected financial markets, financial instruments,...

This paper discusses the effects of monetary indexation on the revenues from monetization in Iceland. The paper starts by showing that monetization revenues fell sharply after indexation was introduced in 1979 and evaluates the different and partly ambiguous factors behind this development. The...

This study shows that the aggregate demand for M1 in the group of countries participating in the Exchange Rate Mechanism (ERM) of the European Monetary System can be expressed as a stable function of ERM-wide income, inflation, interest rates, and the exchange rate of the European Currency Unit...

An unexpected shortage of banknotes emerged during 1992 in the former Soviet Union. The cash shortage is explained by the asymmetry in the monetary union that prevailed, under which one member (the Russian Federation) controlled banknote production while every member could create deposit money....