This paper calculates the equilibrium exchange rates for the Euro and the rest of the G-7 currencies. Building on the methodology of Alberola et al., it is shown that the stock of net foreign assets and the evolution of productivity are the fundamentals underlying the behaviour of the real...

Structural conditions pose a challenge to monetary policy, as the example of Japan shows. In this paper we develop the concept of structural trap, where the interplay of long-term economic development incentives, politics, and demographics results in economies being unable to efficiently...

Sharp exchange rate depreciations, or currency crashes, are associated with poor economic outcomes in industrial countries only when they are caused by inflationary macroeconomic policies. Moreover, the poor outcomes are attributable to inflationary policies in general and not the currency...