Regionalism is taking two forms. It is occurring firstly through free trade arrangements and secondly through monetary arrangements. In this paper, we highlight the issues related to the reversal of sequence between trade integration (free trade agreement) and monetary integration (a monetary...

The paper reviews the experience of regional economic cooperation in the Gulf Cooperation Council (GCC). Conceived as a regional security alliance, the GCC has evolved to become a common market in the making. All six GCC countries participate in the common market project, and additional...

This paper analyzes the dynamic effects of anticipated monetary and fiscal policies in a large monetary union, which is characterized by asymmetric interest rate transmission. We explicitly solve the asymmetric three-country model using the decomposition methods of Aoki (1981) and Fukuda (1993)....

In diesem Beitrag werden die intertemporalen Wirkungen von antizipierten geld- und fiskalpolitischen Maßnahmen im Rahmen eines asymmetrischen Drei-Länder-Modells vom Mundell-Fleming-Phillips-Typ mit rationalen Preis- und Wechselkursänderungserwartungen charakterisiert. Zwei der drei großen...

This paper reviews reassesses the methodology and principal findings of the “Rose effect”, i.e. the trade effects of currency union, looking at both EMU and non-EMU currency unions. The consensus estimate suggests that the euro has already boosted intra-euro area trade by five to ten...

Existing work on wage bargaining (as exemplified by Cukierman and Lippi, 2001) typically predicts more aggressive wage setting under monetary union. This insight has not been confirmed by the EMU experience, which has been characterised by wage moderation, thereby eliciting criticism from Posen...

We test for real interest rate convergence in the EU25 area. Our contribution is twofold: first, we account for the previously overlooked effects of structural breaks on real interest rate differentials. Second, we test for convergence against the EMU average. For the majority of our sample...

Current European integration very much focusses on harmonisation and convergence. This streamlining goes far beyond what is demanded by economic reasoning and turns out - as the euro crisis has demonstrated - to foster tensions among EU member states instead of promoting a flourishing common...