In an open economy, a country may borrow in order to accumulate capital. The paper compares the case of foreign borrowing with a scenario in which a country accumulates capital internally by postponing consumption. The impact of borrowing on the time profile of consumption and of debt is...

We proceed as follows. Section 7.2 deals with the conflicts arising from the persisting asymmetry of demand shocks, possible unfavourable effects on trade and welfare, lack of national and supranational fiscal stabilizers, low mobility and flexibility of labour and shortage of money stocks for...

The primary objective of this paper is to use the Markov regime-switching modeling framework to study the credibility of monetary policy in five member countries of the European Monetary System (EMS) during the period 1979 to 1998. The five countries examined for this purpose are Austria,...

In this paper, the author aims to question the assumptions underlying the economic case for the independent European Central Bank (ECB) and argues that although a European Clearing Agency (ECA) of the type Keynes envisaged for the international economy is not a panacea for the economic problems...