Economic policy interventions of a scale as effected in eastern Germany can be expected to have a significant impact on the economy, which may be in accordance with the objectives of the policy measures or manifest itself in distortions of several kinds. This paper analyzes the structural...

Eastern Germany's recovery from the ?unification shock? has been characterized by deep structural change – with apparent repercussions for the West as well – and an integration process involving both capital deepening (extensive and intensive investment) and labor thinning (net...

This paper uses an oligopoly model with heterogeneous firms to examine how an industry adjusts to rising import competition. The model predicts that in the short run the least efficient firms in the industry become inactive, surviving firms face a fall in output, mark-ups and profits, and the...

Fears are widespread that Mercosur integration leads to further concentration of economic activity in Brazil's industrial centres, while the periphery of Brazil, including the Northeast, will find it more difficult to catch up economically. We evaluate such fears in several steps: - First, we...

The paper discusses the pros and cons of capital account liberalization. Rather than contrasting liberalization and regulation of capital flows as irreconcilable antagonisms, we argue that capital account liberalization requires institutional and regulatory safeguards. Even though the...

Climate change affects the physical and biological system in many regions of the world. The extent to which human systems will suffer economically from climate change depends on the adaptive capabilities within a region as well as across regions. We use an economic General-Equilibrium model and...

Bolivia's mid-term growth prospects are promising but these prospects could be lost, due to social unrest and political instability, if the country does not solve its short-term economic problems, resulting from both external shocks and internal factors. Against this background, this paper...