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This paper develops a large scale overlapping generations model and calibrates it for the U.S. economy. Simulations with the model show that the steady state welfare maximizing inflation rate may be positive, although the numerical results are not robust. It is also shown, however, that increases in the inflation rate are never Pareto efficient because during the transition to the new steady state at least some generations are made worse-off. Using an optimality criterion that takes into account the welfare of all generations, it is found that implementing Friedman’s rule is a Pareto superior policy, and that the efficiency gains derived from implementing such rule could be substantial.

Banking --- Banks and Banking --- Banks and banking, Central --- Central Banks and Their Policies --- Central banks --- Consumption --- Currency issuance --- Deflation --- Demand for Money --- Demand for money --- Econometrics & economic statistics --- Economics --- Financial institutions --- Financial Instruments --- Government and the Monetary System --- Inflation --- Institutional Investors --- Investment & securities --- Investments: Stocks --- Macroeconomics --- Macroeconomics: Consumption --- Monetary economics --- Monetary Policy --- Monetary Systems --- Money and Monetary Policy --- Money --- National accounts --- Non-bank Financial Institutions --- Payment Systems --- Pension Funds --- Price Level --- Prices --- Regimes --- Saving --- Standards --- Stocks --- Wealth --- United States

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The characteristics of recent capital inflows into Latin America are discussed. It is argued that these inflows are partly explained by conditions outside the region, like recession in the United States and lower international interest rates. This suggests the possibility that a reversal of those conditions may lead to a future capital outflow, increasing the macroeconomic vulnerability of Latin American economies. Policy options are argued to be limited.

Balance of payments --- Banking --- Banks and Banking --- Capital account --- Capital inflows --- Capital movements --- Capital outflows --- Central banks --- Currency --- Current Account Adjustment --- Exports and Imports --- Foreign exchange reserves --- Foreign Exchange --- Foreign exchange --- International economics --- International Investment --- International reserves --- Long-term Capital Movements --- Monetary Policy --- Open Economy Macroeconomics --- Real exchange rates --- Short-term Capital Movements --- United States

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The purpose of this paper is to present a model that circumvents the requirement of explicitly setting a period in which the fiscal budget is to be balanced, yet implies that increases in the growth of public debt are bound to increase inflation when there is no perceived commitment to reduce the fiscal deficit. The model is based on a modified version of the cash in advance constraint. The results of numerical simulations suggest that an increase in the growth of debt to finance current consumption leads to an equal increase in inflation. The timing of this increase varies with the size of the deficit and the pace of economic growth. It is shown that small increases in small deficits yield fairly significant increases in inflation. Three policy conclusions are offered.

Inflation --- Money and Monetary Policy --- Public Finance --- Simulation Methods --- Price Level --- Deflation --- Money Supply --- Credit --- Money Multipliers --- Central Banks and Their Policies --- Fiscal Policy --- Debt --- Debt Management --- Sovereign Debt --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Macroeconomics --- Public finance & taxation --- Monetary economics --- Government debt management --- Public debt --- Government debt planning --- Prices --- Public financial management (PFM) --- Money --- Debts, Public --- Mexico

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Banks and banking, Central --- Banka Slovenije --- Banker's banks --- Banks, Central --- Central banking --- Central banks --- Bank of Slovenia --- Banks and banking --- Banks and banking, Central. --- Banka Slovenije. --- Slovenia. --- Eslovènia --- L.R.S. --- Ljudska republika Slovenija --- LRS --- People's Republic of Slovenia --- Republic of Slovenia --- Republika Slovenija --- S.R.S. --- S.R. Slovenija --- Slovenii͡ --- Slovenija --- Slowenien --- Socialist Republic of Slovenia --- Socialistična republika Slovenija --- Socijalistička Republika Slovenija --- SR Slovenija --- SRS --- Szlovénia

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We study empirically daily French and German interest rate changes since the Basle-Nyborg agreement of September 1987. In particular, we ask whether the shock associated with German unification altered the degree of leadership of German monetary policy in the ERM. We conclude that Germany’s leadership role within the ERM largely disappeared in the year following unification but that the Bundesbank has recently begun to reassert its predominance.

Banks and Banking --- Central Banks and Their Policies --- Currencies --- Currency --- Exchange rates --- Finance --- Financial services --- Foreign exchange intervention --- Foreign Exchange --- Foreign exchange --- Government and the Monetary System --- Interest rates --- Interest Rates: Determination, Term Structure, and Effects --- Long term interest rates --- Monetary aggregates --- Monetary economics --- Monetary Policy --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Monetary Systems --- Money and Monetary Policy --- Money supply --- Money --- Payment Systems --- Regimes --- Short term interest rates --- Standards --- United States