The Great Depression is the canonical case of a widespread currency war, with more than 70 countries devaluing their currencies relative to gold between 1929 and 1936. What were the currency war’s effects on trade flows? We use newly-compiled, highfrequency bilateral trade data and gravity...

The empirical literature on central banking has found measures of central bank independence/conservatism to be negatively correlated with inflation and inflation variance across countries. But the cross-country approach has been criticised for its focus on policy outcomes instead of policies,...

This paper looks at how the reputation of a monetary policy making committee is jointly determined with the reputations of its individual members. I ask whether individuals ha ve more or less incentive to gain a reputation for being tough on inflation when they are part of a group. I examine the...

Political Economy and Public Choice have studied the interactions between the economy and the polity for over 60 years now. The present paper endeavours to provide a critical discussion of this literature and its achievements. In particular, it starts with the different approaches based on...

Four types of economicsʺ relevant for institutional analysis are distinguished: Standard Neoclassical Economics; Socio-Economics or Social Economics; New Institutional Economics; and Psychological Economics (often misleadingly called Behavioural Economics). The paper argues that an extension of...

There has been a remarkable rise in the transparency of monetary policy during the last two decades. This paper provides an overview of the ways in which central banks have been providing more information about their monetary policymaking. Furthermore, it reviews the theoretical literature on...

The pending enlargement of the European Monetary Union (EMU) has brought to the fore the discussion of the voting right distribution in the European Central Bank (ECB) council. We show that, in a model where labor unions internalize the inflationary consequences of wage setting, deviating from a...

Central banks affect the resources available to fiscal authorities through the impact of their policies on the public debt, as well as through their income, their mix of assets, their liabilities, and their own solvency. This paper inspects the ability of the central bank to alleviate the fiscal...

We analyze policy in a two-tiered monetary system. Noncompetitive banks issue deposits while the central bank issues reserves and a retail CBDC. Monies differ with respect to operating costs and liquidity. We map the framework into a baseline business cycle model with “pseudo wedges” and...