This contribution investigates the channels through which the relationship between financial deepening and growth materializes. While this relationship has been extensively explored over the recent past, less attention has been paid to the channels through which the relationship comes about. In...

The recent literature provides evidence for a positive relationship between financial deepening and growth but is quite silent on the exact channels through which it materializes. Theory suggests that production efficiency should be one of those main channels. We attempt to capture this channel...

The hesitation of many conventional-wisdom economists to rely more aggressively on fiscal policy measures in order to keep their public finances more or less balanced may have contributed to the persisting current slowdown. We discuss the potential of active fiscal policies in stimulating growth...

We consider whether openness is related to the aggregate technical efficiency in the OECD countries. We obtain efficiency measures using Data Envelopment Analysis and we find that our measure of openness is positively related to the technical efficiency scores.

Austerity policies again prevail in Europe as well as in the United States. These economists, based in England and continental Europe, focus on the poorly understood damage that the austerity mania will almost certainly do on their side of the Atlantic. Why is it happening? There is no rational...

We examine whether the inflation rates of the countries that pursue inflation targeting policies have converged as opposed to the experience of the OECD non-inflation targeters. Using a methodology introduced by Pesaran (2007a), we examine the stationarity properties of the inflation...

We examine the conduct of monetary policy as implemented by the European Central Bank (ECB) throughout the euro area. Two distinct but closely related approaches are utilized, both of which rely on the assumption that monetary policy can be usefully characterized in terms of a simple Taylor...

We consider an (otherwise standard) New Neoclassical Synthesis theoretical framework that allows a role for money. Money in our model has an informational role which facilitates the estimation of the unobserved shocks that drive potential output and thus the state of the economy. For this...