Date of Graduation


Document Type


Degree Type



Chambers College of Business and Economics



Committee Chair

Russell Sobel.


This dissertation is a collection of essays that focus on how the policy actions and design of monetary institutions affect various economic indicators, such as commodity prices, asset prices, and production. Chapter 1 of the dissertation discusses the role and design of monetary institutions. Chapter 2 outlines the process undertaken during the European economic and monetary unification with an emphasis on the European Central Bank (ECB). Chapter 3 empirically analyzes the effects that the ECB has had on the economic stability of its member countries. Specifically, substantial disagreement exists among economists about the degree to which central banks should pursue discretionary stabilization policy. The formation of the ECB provides a unique opportunity to test whether a shift to a less active central bank has resulted in more or less macroeconomic stability for these countries. Chapter 4 investigates whether barriers to currency competition placed on suppliers of money are associated with higher rates of inflation. First, I look at historical data on average annual inflation rates for nine OECD countries that experienced periods of free banking and compare them to their averages under central banking. Second, using a cross-section of OECD countries, I find that countries allowing citizens to legally hold foreign currency tend to have lower average rates of inflation. My results show that allowing competition among currency issuers heightens the incentives for monetary issuers to pursue lower inflation rates. Chapter 5 analyzes the monetary stability and overall economic performance of transition economies based on their chosen monetary regimes. The transition economies had several prominent monetary arrangements to choose from, such as sovereign central banks or currency boards. This chapter surveys the monetary institutions currently in place in several transition economies and compares them based on their ability to control inflation. Chapter 5 presents concluding remarks and summarizes the major findings of the research included in this dissertation.