Widespread concern over real effects of EMU is consistent with new Keynesian approaches to macroeconomic fluctuations, but more difficult to reconcile with a real business cycle (RBC) paradigm. Using a model with frictions as a point of departure, I speculate that nominal price rigidity in...

Trade liberalization is often met with sharp opposition. Recent examples include the so-called ‘Bolkestein’ directive, which allows service providers from a given EU member to temporarily work in another member country. One way to view such a reform is that it simply widens the range of...

The paper analyses the appointment of the European Commission as a strategic game between members of the EU's Council of Ministers and the European Parliament. The focal equilibrium results in Commissioners that duplicate policy preferences of national Council representatives. Different internal...

The increased integration of the economies of Central and Eastern Europe with the European Union (EU) as the Europe Agreements are progressively implemented, is projected to have a significant impact on trade flows with Spain, as exports and imports grow very rapidly, albeit starting from a very...

This paper examines the theoretical arguments and historical evidence about whether regionalism undermines the multilateral trading system. It first considers how to define multilateralism and then surveys over 60 recent contributions to the literature. It classifies theoretical models by four...

This Paper analyses purchasing power parity (PPP) for the euro area. We study the impact of the introduction of the euro in 1999 on the behaviour of real exchange rates. We test the PPP hypothesis for a panel of real exchange rates within the euro area over the period 1973-2003. Our methodology...

The radical liberalization of foreign trade in Central and Eastern Europe since 1989 has been a key part of the economic reform and has been accompanied by a full-scale geographical reorientation of international trade from East to West. Increased trade with the EU has been associated with...

It is often suggested that "European economic and monetary integration is important because people think it is". This paper is an exploratory attempt to formalize this idea. As the basis for our investigation, we rely on recent analysis by Krugman (1989) and Matsuyama (1989), which addresses the...

The paper investigates regional labour markets dynamics in Europe and compares the results to those obtained for the United States. It analyses to what extent regional employment dynamics are common to all regions in Europe and to all states in the United States. It finds that a higher...

This Paper examines the economic effects of the opening of the former Soviet Union. The analysis carried out in the Paper is two-fold. First we simulate the impact of the eastern enlargement of the EU and, second, we analyse how deeper integration between the EU and Russia contributes to this....