The Asian Crisis of 1997-1998 represented the biggest shock to the global economy of the post-WWII period up to that point. Paradoxically, the crisis economies happened to be the Asian members of the group of so-called "emerging markets" – the best and the brightest of the industrializing...

They say "there are no atheists in foxholes." Perhaps, then, there are also no libertarians in crises. Even those in favor of sharply reducing the role of the government usually agree that, for example, there is a valid Lender of Last Resort role for the central bank in the event of banking...

This article seeks to demonstrate the stability of US-China monetary relations before and after the 2007-09 financial crisis. Domestic and international factors make the disruption of the US-China monetary relation extremely unlikely. On the domestic side, China faces a delicate political...

In reviewing what happened in the 1980s in Japan and how the bursting of the bubble created problems in the early 1990s, the following conclusions are obtained. (1) In order to limit damage to the economy from a bubble and its bursting, it is important to build a resilient financial system...

This paper models Federal Reserve policy using Taylor's rule for the nominal interest-rate target and examines the difference between the actual Federal Funds Rate and the Taylor Rule model of behavior for distinct structural changes. Using the real-time macroeconomic data available to the Fed...

This paper analyzes the pillar of modern central bank governance, i.e. central bank independence, highlighting three contributions. First, we provide a systematic review of the economics of central bank independence. Second, using a principal agent model we design a political economy framework,...

In the aftermath of the recent financial crisis and subsequent recession, slow recoveries have been observed and slowdowns in total factor productivity (TFP) growth have been measured in many economies. This paper develops a model that can describe a slow recovery resulting from an adverse...

What accounts for inflation after 2008? We use the prominent pre-crisis Smets-Wouters (2007) model to address this question. We find that due to price markup shocks alone inflation would have been 1% higher than observed and 0.5% higher that the long-run average. Their standard deviation is...

Monetary policy is about the determination of money stock and interest rates to affect economic activity in the short-, medium- and the long-term. Besides helping to eliminate recessionary or inflationary business cycles, controlling interest rates and value of money have important impact on...