This paper examines the macroeconomic effects of the erosion of trade preferences, with a focus on the export of Caribbean bananas to Europe. Estimates are made of the magnitude of implicit assistance provided over a period of three decades to eastern Caribbean countries through banana trade...

We examine the extent to which developing countries that do little, if any, research and development themselves benefit from R&D that is performed in the industrial countries. By trading with an industrial country that has a large “stock of knowledge” from its cumulative R&D activities, a...

We estimate a gravity model to address the question of whether Africa’s bilateral trade with industrial countries is “unusual” compared with other developing country regions. Our main finding is that the unusually low level of African trade is explained by economic size, geographical...

It is widely argued that Europe''s unified monetary policy calls for international coordination at the fiscal level. We survey the issues involved in such coordination in the perspective of macroeconomic stabilization. A simple model identifies the circumstances under which coordination may be...

The success of European Economic and Monetary Union (EMU) will depend on the stability of the euro. The monetary policy framework is yet to be decided, but is likely to involve either money or inflation targeting. Stochastic simulations compare the outcomes for major macroeconomic and financial...

In an indirect monetary policy framework, open market operations become the central bank’s main instrument. In the initial stages, when financial markets are still undeveloped, selection of a financial instrument for those operations and the design of supporting arrangements to ensure the...