Several alterantive scenarios for the economic integration of East and West Germany are analysed. They all share an amphasis of the rile of migration and labor mobility in this process. The effects of congestion costs, rigid wages, human capital and heterogeneity of migrants, and endogenous...

The budget deficit bias is modeled as the result of a domestic common pool problem and of an international externality. Along with Piguvian taxes, a number of policy measures are examined and welfare-ranked: deficit ceilings, golden rules and delegation. In general, the combination of delegation...

This Paper looks at the effect of domestic and external financial liberalization. Using a sample of 27 developing and developed countries, it studies the exchange market pressure and output gap effects of liberalization. The results show that developing and developed countries differ in many...

This paper reviews the history, economic rationale and main components of the project of establishing a monetary union in Europe by 1999. The adoption of a single currency is shown to be the best available option following the liberalization of capital movements. Much of the institutional design...

The possible emergence of a monetary union in Europe raises a number of new and difficult questions. A central concern is the implication for fiscal policy-making. Fiscal policy assumes an increased importance once the monetary policy instrument is lost. The Delors Report has suggested that...

This paper tests two central assumptions regarding transforming economies: that the initial exchange rates were strongly undervalued and that the subsequent evolution of the real exchange rate was both a response to the initial undervaluation and an equilibrium real appreciation. The econometric...

The Paper looks for evidence of grease and sand effects in Europe, in particular the possibility that the natural rate of unemployment is affected by the inflation rate. Looking at four countries, France, Germany, the Netherlands and Switzerland, the Paper reports some preliminary evidence that...

This paper improves upon the recently developed literature on exits from fixed exchange rate regimes in three ways: 1) It allows for two indicators for post-exit macroeconomic conditions, the change in the exchange rate and the change in the output gap; 2) it tests whether the distinction...

The Paper explores how fiscal policy can be made both more disciplined and more counter-cyclical. It first examines whether the decline of public debts observed in the OECD area during the 1990s can be explained either by less activism or by a priority towards consolidation. It then argues that...

It is often believed that the German Economic and Monetary Unification will result in an appreciation of the DM. This conclusion is reached when attention is exclusively directed to the short-run demand side. In this note, it is shown that supply-side and long-term considerations suggest instead...