During the first two years of monetary union, the euro's weakness surprised most market participants. Explanations proliferated ranging from fundamentals such as differences in growth prospects to psychological factors such as herd behaviour, but no single story fully accounts for the observed...

Pendant les premieres annees de l'union monetaire, la faiblesse de l'euro a surpris la plupart des observateurs. Les explications se sont multipliees allant de fondamentaux tels que les differentiels de croissance anticipes aux facteurs psychologiques tels que les comportements gregaires, mais...

One year ago most economic observers predicted that "fundamentals" were such that the euro was set to appreciate. In the event, the opposite has occurred. This has rekindled a debate on how well foreign exchange markets reflect fundamental determinants and led to calls for greater exchange rate...

Cet article fait le point et clarifie le concept et l'utilisation des indices des conditions monetaires (ICM), dont le principe est d'agreger differentes variables monetaires et financieres en un indicateur unique. Si les ICM paraissent pouvoir fournir une information pertinente, celle-ci doit...

Monetary policy has been one of the main pillars of the post-2001 stabilisation programme. Encouraged by its success, the central bank shifted from implicit to explicit inflation targeting in 2006 and set a medium-term inflation target of 4%, applicable from end 2007. However this objective...

In the years preceding the onset of the global financial crisis, the Central Bank of Russia (CBR) had two goals: to reduce inflation and limit the real appreciation of the rouble. Given the strength of Russia’s balance of payments during the ten years through the first half of 2008, the de...

This paper presents a stylised model in which either a savings glut or an exchange rate peg in emerging economies drives down the level of interest rates in advanced economies and, when it hits the zero-rate bound, produces a welfare loss. It shows that structural reform in the pursuit of better...

South Africa’s macroeconomic framework has served the economy well, but should be strengthened to make the economy more resilient to external shocks. Enhancing the credibility of the inflation target would provide the monetary authorities with more space for flexibility in the face of...