Pricing-to-market (PTM) behaviour implies that exporters adjust their prices to the prevailing prices in their export markets. For the importing country, PTM effects can be interpreted as a measure of the stability of domestic prices against foreign price and exchange rate developments. PTM...

A two-country sticky-price model is used to analyse the interactions between fiscal and monetary policy. The role of an u0091activistu0092 fiscal policy as a stabilisation tool is considered and a measure of the welfare gains from international fiscal policy cooperation is derived. It is found...

The presence of a lower bound of zero on nominal interest rates has important implications for the conduct of optimal monetary policy. Standard rational expectations models can have alternative steady states as well as non-unique laws of motion, i.e. there can be possible sunspot equilibria....

We use a Vector Auto Regression (VAR) analysis to explore the (spill-over) effects of fiscal policy shocks in Europe. To enhance comparability with the existing literature, we first analyse the effects of these shocks at the national level. Here, we employ identification based on Choleski...

Two seemingly unconnected empirical results suggest an intriguing mechanism. First, economic integration helps harmonize prices internationally, with trade being the primary channel (Rogoff 1996, Goldberg and Knetter 1997). Second, monetary union may greatly increase the amount of trade among...

On 1 May 2004, ten countries became members of the European Union. The addition of Cyprus, the Czech and Slovak Republics, Estonia, Hungary, Latvia, Lithuania, Malta, Poland and Slovenia brings the total number of Member States to 25. Although the EU has successfully integrated new countries on...

The ECB has an obligation to provide statistical information of the highest quality to the public and this third edition of the publication u0093Bond markets and long-term interest rates in non-euro area Member States of the European Union and in accession countriesu0094 serves to contribute to...

Enlargement will provide major impulses for economic integration and new possibilities for the division of labour in the enlarged EU will offer additional opportunities for growth. At the same time, ensuring a more or less uniform regulatory framework in a single market comprising 25 or more...

The paper studies the incentives to join a monetary union, and the incentives to reform within a monetary union and within the candidate countries, respectively. It presents some "orders of magnitude" evidence on the size and balance of the incentive effects for joining and being a member, and...