This paper tests whether the proposition that globalization has led to greater sensitivity of domestic inflation to the global output gap (the 'global output gap hypothesis') holds for the euro area. The empirical analysis uses quarterly data over the period 1979-2003. Measures of the global...

There is a broad consensus that the quality of the political system and its institutions are fundamental for a country's prosperity. This paper focuses on Italy's troubled politics over the past 35 years and asks whether the adoption of the euro in 1999 has helped insulate Italy's financial...

The main task of central banks is to set the level of short-term nominal interest rates in reaction to economic developments, with the aim of achieving their statutory objectives (typically some combination of inflation and output variability). If agents are forward-looking, central banks can...