This paper studies how the exposure of a country's corporate sector to interest rate and exchange rate changes affects the probability of a currency crisis. To analyze this question, we present a model that defines currency crises as situations in which the costs of maintaining a fixed exchange...

In this paper we analyse a chronicle of economic theory on international financial integration post-WWII to the present date. Our focus is on theories that have somehow quantify the state and speed of international financial integration. We are able to contrast and compare three distinct strands...

The objective of this note is to present the evolution of both the economics and the political economy of monetary policy in the last three decades – first the Great Moderation and then the Financial Crisis – as a story of two intertwined tales: on the one side the tale of how to govern...

This paper studies how the exposure of a country's corporate sector to interest rate and exchange rate changes affects the probability of a currency crisis. To analyze this question, we present a model that defines currency crisis as situations in which the costs of maintaining a fixed exchange...

This paper starts with a discussion of the various aspects of accountability of central banks. On the basis of this discussion we construct an indicator for accountability for 16 central banks, including the European Central Bank. It is shown that the degree of accountability differs...

Should central banks increase their degree of transparency any further? We show that there is likely to be an optimal intermediate degree of central bank transparency. Up to this optimum more transparency is desirable: it improves the quality of private sector inflation forecasts. But beyond the...

Central banks have become more and more transparent about their monetary policy making process. In the central bank transparency literature the distinction between actual and perceived central bank transparency is often lacking. However, as perceptions are crucial for the actions of economic...

We provide an up-to-date overview of the literature on the desirability of central bank transparency from an economic viewpoint. Since the move towards more transparency, a lot of research on its effects has been carried out. First, we show how the theoretical literature has evolved, by looking...

This paper examines the effect of monetary policy on the exchange rate during currency crises. Using data for a number of crisis episodes between 1986 and 2004, we find strong evidence that raising the interest rate: (i) has larger adverse balance sheet effects and is therefore less effective in...