Central banks have become increasingly transparent during the last decade. One of the main benefits of transparency predicted by theoretical models is that it enhances the credibility, reputation, and flexibility of monetary policy, which suggests that increased transparency should result in...

This paper examines the effect of monetary policy on the exchange rate during currency crises. Using data for a number of crisis episodes between 1986 and 2004, we find strong evidence that raising the interest rate: (i) has larger adverse balance sheet effects and is therefore less effective in...

In this paper we incorporate the term structure of interest rates in a standard inflation forecast targeting framework. We find that under flexible inflation targeting and uncertainty in the degree of persistence in the economy, allowing for active learning possibilities has effects on the...

The integration of financial markets is a fast growing phenomenon worldwide, but especially in the EU. Along with the positive aspects such as simplifying financial transactions, there are also negative implications attached to it. As was the case with the current economic and financial crisis,...

Central banks have become more and more transparent about their monetary policy making process. In the central bank transparency literature the distinction between actual and perceived transparency is often lacking. However, as perceptions are crucial for the actions of economic agents this...

The rationale for the independence of central banks is the so-called 'Rules versus Discretion' debate, which is described in this article. Central bank independence is considered an effective measure against governments from manipulating policy instruments to spur short-term economic growth and...

The rationale for the independence of central banks is the so-called 'Rules versus Discretion' debate, which is described in this article. Central bank independence is considered an effective measure against governments from manipulating policy instruments to spur short-term economic growth and...