In the nineties, the number of currency crises has been high, both in the industrial world and among emerging countries. An important characteristic of many of these crises is that they started in one country but very soon affected others as well. Currency crises seemed to be contagious. In this...

This paper focuses on ihe rationale behind fiscal solidarity. It is argued that, while at the national level the main aim of regional policies is to downsize the cost of labor market policies, the motivation behind EU transfers is less straightforward. Here, regional assistance should rather be...

Over the course of the past few years, too much credit has been made available worldwide, due to financial innovation, overly optimistic expectations and loophole-ridden regulation. Regulatory supervisors have failed because they were unable to prevent this situation. Things took a bad turn...

In the empirical literature, not much support is found for the uncovered interest parity. Especially with free floating exchange rates, the forward rate is a biased predictor of the future exchange rate. This phenomenon can both be explained by an absence of rational expectations or by risk...

One of the major puzzles of the economic profession is the pricing of exchange rates. Despite the development of numerous theories, the actual behaviour of exchange rates, especially in the short run, is not well understood. This article evaluates several popular exchange rate theories and...