The simultaneous occurrence of devaluation and recession in Mexico in 1995, as well as in the East Asian economies more recently, appears to contradict the conventional view that devaluations are expansionary. Moreover, a sizeable theoretical and empirical literature also argues that, contrary...

From an international perspective, the European rate of unemployment has been relatively high and growing over the last one to two decades; on this background, the parallel rise in profit shares in a number of European countries seems to be at odds with expected economic behavior. The paper...

The paper reviews the recent conduct of monetary policy and central banks' interest rate setting behaviour in emerging market economies. Using a standard open economy reaction function, we test whether central banks in emerging economies react to changes in inflation, output gaps and the...