The paper develops a three-asset-portfolio model to analyse consequences of foreign exchange market operations by Asian central banks on the exchange rates between euro, dollar and an Asian currency. It is found that - contrary to public belief - the purchase of dollar assets by Asian central...

First paragraph: Ten years after the introduction of the euro, the question of economic divergence has gained new prominence. While immediately after the introduction of the euro, skeptical voices about the young currency's sustainability fell silent, the debate first reemerged in the years...

First paragraph: As Claudio Sardoni in this issue points out, Giuseppe Fontana and Mark Setterfield (2009) have edited a very interesting volume. Given the vast amounts of macroeconomic literature published since Hick's invention of the IS-LM model and the still existing predominance of this...