This paper explores the implications for open economy macroeconomic analysis of the "cambist" approach to the forward exchanges, put forward by Lavoie (2000) and others. It argues that logically the counterpart to the rejection of any domestic natural rate of interest must also be the rejection...

This paper examines four alternative types of guidelines for monetary policy: (1) stabilizing the real policy rate of interest at a "low" level, (2) pegging the nominal policy rate, (3) employing a standard monetary policy reaction function to target inflation, and (4) invoking the notion of a...

In this paper, we argue that an explicit inflation-targeting policy is not likely to be a desirable monetary policy rule, even if it were agreed that a lower inflation rate is an important goal of policy. Inflation targeting is not neutral in the short or the long run, and a strict policy will...

This paper provides a theoretical framework within which to examine issues of macroeconomic policy autonomy for the small open economy in an increasingly global international environment. We show that substantial policy leverage continues to exist provided that the jurisdictions concerned...

This note provides an explanation of the relationship between the nominal and real lending rates of the commercial banks and central bank policy rates. It suggests that "a real interest rate rule" on the part of the central bank would influence the real lending rate perceived by commercial banks...