This paper examines the evolution of the relative price between tradable and nontradable goods in a group of European countries. A model of an open economy is used to analyze different factors that can account for an increase in the relative price of nontradable goods. These factors are: (a)...

The distributional effects of the minimum wage are analyzed in a model where skilled and unskilled labor enter the production function. It is argued that distributional goals are best achieved by letting the labor market clear and achieving redistribution through taxes and transfers

This paper examines the objectives and instruments of trade policy in the European Community (EC) from 1987 until mid-1992. It reviews the Community’s institutional setting and policy environment as background to recent trends in EC trade policies and trading arrangements. A discussion of key...

This paper highlights key macroeconomic issues related to VAT harmonization. A model is developed which emphasizes the effects of changes in the time profile of various taxes on international behavior. Dynamic simulations reveal that the macroeconomic and welfare implications of VAT...

The sheer size of mandated trade among members of the Council for Mutual Economic Assistance (CMEA), and its composition and quality, means that its reorientation toward other markets entails a whole complex of structural adjustment policies. To be successful, policy reform must be...

This paper reasseses the significance of persistent current imbalances as they become easier to finance in the process of European integration. After highlighting some limitations of simple saving-investment guidelines for policies toward the current account, the paper shows that an economy’s...

Although the deficit is a useful construct for Keynesian analyses of fiscal policy, the deficit appears to be a less useful measure of fiscal policy within all but a restricted class of intertemporal neoclassical models. This paper suggests that the nature of deficits in a simple certainty model...

Labor productivity levels in Bulgaria lag well behind that in the EU, weighing on the convergence process. Stronger productivity growth would allow Bulgaria to close the income gap with the EU average more quickly and to alleviate the structural problems in its labor market, reflected in its...

This paper examines whether the clarity of central bank communication about inflation has changed with the economic environment. We use readability statistics and content analysis to study the clarity of communication on the inflation outlook by seven central banks between 1997 and 2010....