We apply a disequilibrium model of credit demand and supply to test the credit crunch hy- pothesis. We suppose that firms face credit rationing and a realised outstanding loan will be the minimum desired level of commercial bank loans and bank limit for the firm. We adopted the disequilibrium...

This paper studies the behaviour of inflation rate, short-term interest rate and nominal exchange rate after leaving fixed exchange rate arrangement and move to floating. We find that countries with rigid exchange rate policy, less frequently adjusted central parity and narrow exchange rate...

The European integration process is theoretically supported by optimum currency area (OCA) theory which originates from debates about fixed versus flexible exchange rates, treating a common currency as the extreme case of a fixed exchange rate. The key issues of theoretical and empirical...

The author focuses on the current problems of the common monetary policy implementation in the Eurozone in context of output stabilization function. The author focuses on the money demand function stability and its estimation. The stable money demand function ensures that the money supply would...

The purpose of our paper is to define rules for decision of existence spurious synchronization of countries within the currency area. We devote this new methodological approach from an empirical research based on the variability of a dynamic correlation (correlation in frequency domain). We...

There is significant empirical evidence that the introduction of the euro led to a significant increase of perceived inflation in most countries. Such an increase and persistence in the perceived inflation might then have an impact on inflation expectations and other macroeconomic variables. The...

The recent economic crisis is regarded as symmetric shock which negatively affects all Eurozone member countries. Even if the whole euro area is in recession the probability of asymmetric shock arises on the monetary side of the economy. The issue is that money supply is unevenly distributed...

We focus on the financial instability hypothesis defined as rapid credit growth accompanied with a significant increase in asset prices. We used contribution of the national banking systems within the euro area and identified significant relationship between the money velocity and asset prices...