Central banks’ economic and political importance has grown in advanced economies since the start of the Great Financial Crisis in 2007. An unwillingness or inability of governments to use countercyclical fiscal policy has made monetary policy the only stabilization tool in town. However, much...

This paper studies empirically the relative effectiveness of monetary and fiscal policies on growth. Unlike many previous papers which have focused, to a large extent, on the effect of monetary or fiscal policies separately, this paper considers the comparative efficacy of the two policies on...

It is often emphasised that seigniorage financing of public sector deficits is technically a “free lunch” if the economy has not attained the full employment levels. However, conservative macroeconomic policies in many emerging and developing economies, especially in the last two decades,...

We analyse the effects of fiscal and monetary policies in two South Eastern European (SEE) economies with currency pegs (Croatia and Macedonia) estimated by the Bayesian Vector Autoregression. The main results of the study are as follows: Fiscal tightening leads to economic expansion in...

The aim of this paper is to analyse whether the economic policy response capability was a relevant factor for minimizing the 2008 financial crisis severity within its first year. The research hypothesis is that countries with a larger space for expansionary policies have registered a less severe...

The hypothesis of the paper is that the macroeconomic policies implemented in Peru during the recessions of 1998-2000 and 2008-2009 were substantially different. This explains why economic performance in the second was much better than in the first. In monetary policy, both the exchange rate of...

The purpose of this article is to carefully lay out the internal monetary and fiscal transmission mechanisms in the context of a New Keynesian model, with a particular focus on the role of capital - the most vital ingredient in the transition from the basic framework to the medium - scale DSGE...

The turmoil affecting capital markets since summer 2007 and its intensification since mid-September 2008 inflicted noticeable blows to the world economy. Although the high-risk real estate American market is believed to be the immediate source of such turmoil, these last years the euro-zone...

The purpose of this article is to carefully lay out the internal monetary and fiscal transmission mechanisms in the context of a New Keynesian model, with a particular focus on the role of capital - the most vital ingredient in the transition from the basic framework to the medium - scale DSGE...

We build on a New Keynesian Dynamic Stochastic General Equilibrium (DSGE) model to explore the macroeconomic consequences of fiscal expansionary shocks during the economic crisis of 2008 in the eurozone. In this setting, we find that the big four eurozone economies (France, Germany, Italy, and...