A Review of the Impact of External Shocks on Monetary Policy Effectiveness in Non-WAEMU Countries

In this paper, the extant literature on the impact of external shocks on monetary policy effectiveness with reference to non-WAEMU countries is reviewed. The importance of this literature review is to provide contemporary perspectives to scholars and policymakers on the relevance of the incidence of external shocks to the effectiveness of monetary policy with reference to non-WAEMU countries. The literature reviewed in this study shows that, on the whole, the extent and the degree to which external shocks are transmitted to the domestic economy substantially depend on a plethora of features, namely the absence of exchange rate flexibility; a strong export concentration, especially with respect to commodities; the level of global economic integration; restricted capacities of production; the absence of competitiveness in exports; over-reliance on foreign aid; foreign reserves that are not adequate and capital account openness.

Efficiency of Ukraine’s monetary policy in the context of achieving monetary security

The article explores the effectiveness of monetary policy by identifying its main criteria and analyzing indicators of monetary security. The authors draw conclusions about the state of monetary policy and its impact on Ukraine’s economic security. The analysis indicates that the country’s monetary policy is sufficiently effective to achieve the monetary goals and guarantee economic security. Four groups of monetary threats to economic security were identified, related to monetary policy, banking, investment and institutional environment, which were rated on a scale from 0 to 5 for 2010, 2015 and 2020. At the beginning of 2020 Ukraine’s economic security was mainly threatened by excessive dollarization of the economy and a small share of long-term loans in all total loans granted by banks. The authors argue that effective monetary policy at the present stage should focus on stabilizing, modernizing and restructuring the industry.

Hidden Blemish in European Law: Judgements on Unconventional Monetary Programmes

This article studies the hidden blemishes of two benchmark rulings of the European Court of Justice (ECJ). In 2015 and 2018, the ECJ approved two unconventional monetary instruments, among others ‘Outright Monetary Transactions’ and the ‘Public Sector Purchase Program’. Yet, there is a vigorous debate about both monetary operations in law and economics. In this interdisciplinary article, we address law and economic arguments in order to elucidate insights to the legal community. In particular, we elaborate on the legal implications of a variety of concerning issues such as public policy interference, effect on wealth redistribution, erosion of democratic legitimacy and lack of effectiveness of monetary policy. These topics remain disregarded in the ECJ rulings. Consequently, the verdicts do not identify the economic boundaries of the European Central Bank’s mandate appropriately.

Macroeconomic policy in a pandemic era: What does the IS-LM model show?

This paper examines how the COVID-19 pandemic will affect macroeconomic policy, setting the dynamics of interest rates in the short to medium term for developed countries and developing (transition) economies. The macroeconomic model of general equilibrium (IS-LM) was chosen as a simple tool for analysis allowing us to identify mechanisms for translating the effects of the pandemic and the corresponding government policy on interest rates. We emphasize the fundamental differences of the situation in the countries that were already in a liquidity trap at the beginning of the pandemic and in the economies still far from this state. The results of the analysis demonstrate the limited effectiveness of monetary policy to restore economic activity in both groups of the countries and the need for fiscal stimulus to reduce uncertainty (or lower the slope of the model curves). Under these conditions, the capacity of debt financing of additional public expenditures, the functioning of the financial sector and ensuring macroprudential stability pose serious problems for economic policy.