We begin reviewing the standard Barro-Gordon model of inflation bias and considering the delegation of monetary policy to a more conservative central banker as suggested by Rogoff. We emphasise how inflation bias can be reduced, seemingly at the expense of increased stabilisation cost. We note...

This paper discusses the practical application of identification in cointegrated systems. It will argue that in a common realistic modelling situation of a limited data set and the theory requirements of a fairly rich model, the techniques proposed in the existing literature are almost...

This paper reviews the theory of balance-of-payments crises, and its implications for identifying potential leading indicators of crises. It discusses and evaluates three different empirical approaches to balance-of-payments crises: the signalling, discrete-choice, and structural approaches....

Many emerging market economy (EME) financial crises in the 1990s quickly spread to other countries. By contrast, spillovers from the Argentina crisis in 2001-02 appear to have been much more limited. Why do some crises spread widely and others do not? In this paper the joint importance of...

Non-financial corporations from emerging market economies (EMEs) have increased their external borrowing significantly through the offshore issuance of debt securities. Having obtained funds abroad, the foreign affiliate of a non-financial corporation could transfer funds to its home country via...

Corporates in many EMEs have taken advantage of unusually easy global financial conditions to ramp up their overseas borrowing and leverage. This could expose them to increased interest rate and currency risks unless these positions are adequately hedged. The key question is whether EME...