In order to examine the optimum currency area case for EMU, we estimate structural VARs in output, the real exchange rate and prices for 14 EU countries and a small control sample. Using quarterly data since the end of bretton Woods, we find that (1) the data are strongly correlated for the...

Following Blinder's (1997) suggestion, we examine the implications for the optimal interest rate rule following the relaxation of the assumption that the policymaker's loss function is quadratic. We investigate deviations from quadratics for both symmetric and asymmetric preferences for a single...