The rise in European unemployment is often blamed on increased mismatch between labour supply and demand- either by age, skill or region. To investigate this, we first develop models to explain differences in unemployment rates - both where labour supply is given and where it responds through...

This paper traces (a) the impact of credit expansion on inflation and (b) the impact of inflation on the real liquidity of households and enterprises. From April 1992 to September 1993 households paid an inflation tax equal to 13.3% of GDP and received almost no new credits. Enterprises received...

Russia has come near to hyper-inflation and pulled back from the brink. But the position is still delicate. In this paper we review the past history, and then what needs to be done and the difficulties of doing it. Russian monetary policy since the reform has gone through three phases - first...

Poland has tackled its economic problems with courage and, thus far, success. Hyperinflation has ceased, the well-chosen exchange rate has held, and wage behaviour has been responsible. A major recession is under way, and it must not become endemic. A big export effort is needed, followed with...

According to Paul Krugman, "the European unemployment problem and the US inequality problem are two sides of the same coin". In other words, both continents have had the same shift in demand towards skill; in the US relative wages have adjusted and in Europe not. The implication of this...

The Western media often depict the average Russian as starving and destitute. This is of course absurd. But hardship has increased since the reform for a substantial portion of the population. Average living standards have fallen and inequality has increased. How much? We begin by documenting...

Three main criteria should govern a privatisation plan: speed, fairness, and efficient control. From this view we derive our optimum scheme, though we recognise that in most countries it needs modifying to existing circumstances. 1. Privatisation should be by gift, not sale. But distribution by...

Open unemployment in Russia has been growing very slowly - by only about 1 percentage point a year. This is mainly because of a degree of wage flexibility unknown in the West. Comparing industries over a two year period we find that, if relative employment fell by 10%, relative wages fell by...

In Eastern Europe (as in Western) wages will be mainly set by collective bargaining. The bargains are likely to be at a level of the firm. Cross-country evidence suggests that where there is a high coverage of collective bargaining and bargaining is at a firm level, quite high unemployment is...