The hesitation of many conventional-wisdom economists to rely more aggressively on fiscal policy measures in order to keep their public finances more or less balanced may have contributed to the persisting current slowdown. We discuss the potential of active fiscal policies in stimulating growth...

We examine the conduct of monetary policy as implemented by the European Central Bank (ECB) throughout the euro area. Two distinct but closely related approaches are utilized, both of which rely on the assumption that monetary policy can be usefully characterized in terms of a simple Taylor...

This paper considers per capita income and productive efficiency beta-convergence for 15 EU countries (EU-15) during the European Economic and Monetary Union and the period preceding it. A production frontier approach is used to obtain efficiency measures. Even though we uncover evidence of...

This paper reviews some aspects of the literature on the design of fiscal policy rules in monetary unions. We consider the theoretical rationale that motivates the need for imposing fiscal policy rules in the context of a monetary union. Then we analyze mechanisms (other than rules) that can...

This paper engages the last testimony of the Chairman of the Federal Reserve System, Alan Greenspan, before a joint session of Congress in July 2005. It identifies nine areas we relate to the arguments of John Kenneth Galbraith, summarized in his recent contribution, The Economics of Innocent...

Relevant economic literature frequently focuses on the impact of credit shocks on housing prices. The macroeconomic doctrine of the new consensus macroeconomics completely ignores bank credit. However, the Great Recession has highlighted the importance of bank credit. The purpose of this article...

Relevant economic literature frequently focuses on the impact of credit shocks on housing prices. The macroeconomic doctrine of the new consensus macroeconomics completely ignores bank credit. However, the Great Recession has highlighted the importance of bank credit. The purpose of this article...

Current economic policy upgrades monetary policy and downgrades fiscal policy. Monetary policy involves the manipulation of the central bank interest rate, with the specific objective of achieving the main goal of monetary policy, which is, in most cases, the inflation rate. Fiscal policy should...

This paper attempts to quantify the U.S. housing market slump and its likely impact on consumption. In doing so, it bypasses the traditional approach that suggests that there is no nationwide housing market but a compendium of segmented markets. The paper is not an exercise in forecasting but an...