A Preliminary Evaluation of Monetary Policy Rules for Russia

The paper reviews the recent conduct of monetary policy and the central bank’s rule-based behavior in Russia. Using different policy rules, we test whether the central bank in Russia reacts to changes in inflation, output gap and the exchange rate in a consistent and predictable manner. Our results indicate that during the period of 1993-2002 the Bank of Russia has used monetary aggregates as a main policy instrument in conducting monetary policy.Monetary policy rules; exchange rate; central bank; Russia.

Integrated monetary and exchange rate frameworks: are there empirical differences?

The aim of the paper is to empirically estimate whether the different monetary and exchange rate frameworks observed in the accession countries of Central and Eastern Europe and the Baltic States do yield different outcomes in terms of level and variance of a set of nominal and real variables. The author follows and extends the methodology developed by Kuttner and Posen (2001), who perform a combined analysis of the individual effects of exchange rate regimes, central bank independence and announced targets in nominal variables for a large set of developed and developing countries. They also estimate that a set-up combining a free float, an independent currency board and inflation targeting yields an outcome that mimics the price stabilisation advantages of a hard peg without its drawbacks in terms of extreme volatility. This sample of countries, not covered by the Kuttner and Posen study, supports their conclusions for both nominal and real variables, testing for both the individual and combined effects of the frameworks and indicating that a flexible exchange rate regime, coupled with CBI and DIT, would be Pareto-improving when compared to harder regimes.

Financial Liberalization and Business Cycles: The Experience of Future EU Member States in the Baltics and Central Eastern Europe

This paper extends the work of Kaminsky and Schmukler (2003) to the Baltic and Central Eastern European future Member States of the European Union, to test if the same short-run increase in cyclical volatility arising from financial integration is observed in this specific sample of “emerging markets”. This work finds signs that, contrary to other emerging markets, this does not happen: for the future Member States, financial integration, similarly to the outcome observed in mature market economies, reduces cyclical volatility both in the short and in the long run. Weak indications are found that this may happen partially due to the anchoring of expectations provided by the EU Accession, and to the more robust institutional framework imposed by this process onto the countries in question.Enlargement, European Union, financial liberalization, booms, busts, cycles, volatility.

"EMU and Enlargement: A Review of Policy Issues"

This report is the final output of the study "Economic and Monetary Union and Enlargement" commissioned by the Directorate-General for Research of the European Parliament in May 1999. An Interim Report was provided in September 1999. The report reviews the mains policy issues concerning the accession of 10 Central and Eastern European Countries, and Cyprus and Malta, and the interaction with their parallel integration into the Economic and Monetary Union.Euro, Enlargement, Transition Economies, Exchange Rate Regimes, Monetary Policies, DIT.

Un modelo macroeconómico integrado para el Caribe

Incluye BibliografíaEl objeto del presente artículo es calcular un modelo macroeconómico integrado simple para la subregión del Caribe. Utilizando una serie homogénea de datos, que comprende de 1980 a 1991 en una muestra de 12 países de la subregión, y un modelo relativamente sencillo con especificaciones no conflictivas de las relaciones estructurales, se genera un grupo representativo y sistemático de estimaciones para un determinado conjunto de parámetros en un cálculo agrupado e individual de los países

An integrated macro-model for the Caribbean subregion

Includes bibliographyThis article seeks to calculate a simple integrated macroeconomic model for the Caribbean subregion. Using a homogeneous data series covering the period from 1980 to 1991 for a sample of 12 countries of the subregion and a relatively simple model with non-conflicting specifications of structural relations, a representative and systematic group of estimates is generated for a given set of parameters, with grouped and individual calculations for the countries

Political Business Cycles in EU Accession Countries

This paper considers whether political business cycles existed in East European accession countries during the period 1990-9. Based on the Mundell-Fleming model expanded in Clark and Hallerberg (2000), we argue that the type of exchange rate regime and the relative independence of the central bank affects the instruments governments use to influence the economy before elections. In our empirical analysis, we find that accession countries with dependent central banks and flexible exchange rates have looser monetary policies in electoral periods than in non-electoral periods. If a country has a fixed exchange rate regime, it manipulates its economy in election years through running larger budgets instead of through looser monetary policy. The presence of such cycles in Eastern Europe has implications for the introduction of the euro in EU accession countries

Los países del Caribe y el Area de Libre Comercio de las Américas

Incluye BibliografíaLos países del Caribe están muy conscientes de sus limitaciones de tamaño, ya sea que se les considere en función de uno o de todos los criterios de superficie, población o producto interno bruto (PIB);. Esto, paradójicamente, también los obliga a sumarse a un grupo comercial más numeroso por temor a que, de lo contrario, no se les permita participar plenamente en la actividad internacional. En este artículo se examinan varias características propias de los países de pequeño tamaño, sobre todo las que parecen especialmente pertinentes para el Caribe. Se observa que, de hecho, las limitaciones de tamaño plantean mayores exigencias a las autoridades nacionales en lo que respecta a la idoneidad y la coherencia de la gestión económica; además, hacen que los ciudadanos de los países pequeños vivan expuestos a un mayor nivel de riesgos, derivados de los caprichos del clima o bien de las turbulencias de los mercados internacionales. Se admite asimismo que la gama de opciones productivas que se abre a los países pequeños es de por sí limitada y que los costos de la transición necesaria para ingresar al área de libre comercio de las Américas (ALCA); bien pueden ser elevados, sobre todo porque algunos países del Caribe han aplicado políticas que de alguna manera son contrarias a las exigencias de esta nueva situación. Se hace hincapié en la necesidad de que muchos países pequeños se preparen mejor para acceder al ALCA y se formulan varias propuestas de política interna y externa que podrían adoptarse con ese fin. También se sugiere que, a fin de mitigar los costos de corto plazo de la transición y elevar la propia capacidad de participar en el ALCA, los países pequeños traten de asegurar en las negociaciones previas algunos arreglos de carácter transitorio centrados en las políticas internas, las medidas para aumentar la producción de bienes exportables y las estrategias de negociación conjunta