We study the relation between capital accumulation, fiscal policy, and sovereign debt dynamics in a small open economy. The government maximizes spending, facing borrowing constraints conditionality requirement. Debt are forward looking, being driven by endogenous constraint. Current is determined expectations about government's ability to finance itself future, opening room for indeterminacy. ...

The interaction of monetary and fiscal policies is a crucial issue in a highly integrated economic area as the European Union. We investigate to which extent the EMU, that introduced a common monetary policy and restrictions on fiscal policy at the national level, benefits from macroeconomic policy cooperation due to the various interactions, spillovers and externalities from national macroecon...

Athanasios Orphanides and John C. Williams’ excellent conference paper, “Inflation Scares and Forecast-Based Monetary Policy,” contributes importantly to the new and rapidly growing branch of the literature on bounded rationality and learning in macroeconomics. Their paper, like many others, derives interesting and useful theoretical results that show how the introduction of bounded rationality...

This paper investigates whether Taylor rule can better guide the monetary policy in developing economies. Existing literatures do not focus on the implementability of rule-based monetary policy in emerging economies. In last two decades a number of industrialised countries have gained success in achieving macroeconomic policy goals by switching to rule-based policy regime from discretionary fra...

This quotation appears at the beginning of the Policy Recommendations section of the Organization for Economic Cooperation and Development's recent jobs study (OECD, 1994). However, of the fifty-nine separate recommendations only three concern macroeconomic policies, and but 10 percent of the background analysis is concerned with macroeconomic issues. The three specific macroeconomic recommenda...