This is a summary of the paper entitled : “The Mean Squared Prediction Error Paradox”. In that paper, we show that traditional comparisons of Mean Squared Prediction Error (MSPE) between two competing forecasts may be highly controversial. This is so because when some specific conditions of...

The purpose of this document is to discuss, from the monetary point of view, the long run effects of a fixed exchange rate regime on prices and interest rates. We develop a partial equilibrium model for the monetary sector of a small open economy in which we link fixed exchange rate to the...

Even in the face of a continuously changing economic environment, interest rates often remain unadjusted for long periods. When rates are moved, the norm is for a series of small unidirectional discrete basis-point changes. To explain these phenomena we suggest a two-equation system combining a...

This study addresses the potential trade-off between inflation and exchange rate targeting in former transition countries, which now may be labeled emerging market economies and which prepare for entry into the Economic and Monetary Union (EMU). Among this group of countries, some implemented...

After the experience with the currency crises of the 1990s, a broad consensus has emerged among economists that such shocks can only be avoided if countries that decided to maintain unrestricted capital mobility adopt either independently floating exchange rates or very hard pegs (currency...

This study examines the development of monetary theory and various policy frameworks as implemented at the time of writing. The aim of the study was to determine the effect of monetary policy on disintermediation and re–intermediation throughout the periods of the various monetary policy...

Is inflation targeting an appropriate framework for monetary policy? Experience from the inflation-targeting countries countries are optimistic about inflation targeting as a monetary-policy framework. South Africa is also following this trend.The international literature review of the topic...

The paper analyzes exchange rate regimes implemented by the major Latin American countries since the Second World War, with special attention on the period of the second globalization process beginning in the 1970s. The analysis follows a historical narrative aiming to provide an understanding...

The paper examines the inflation targeting regime in the context of transition economies. Recent years have witnessed an increasing number of central banks in these countries moving towards the implementation of inflation targeting regimes. However, the success of such a regime depends largely...

This study proposes an extension to the inflation targeting framework for Poland that takes into consideration the exchange rate stability constraints imposed by the obligatory participation in the ERM2 on the path to the euro. The modified policy framework is based on targeting the differential...