The behaviour of the exchange rate under a floating exchange rate regime for a small open economy with perfect capital mobility may appear like a managed float or even a firmer peg. We present a canonical new neo-classical synthesis open economy model where the central bank follows a strategy...

Over the past decades, cross-border financial flows have increased in importance and have in many occasions exceeded the underlying current account positions. This phenomenon has been accompanied by an increase in the volume of international equity transactions that accentuate the role of...

This paper considers the role of foreign investors in developed-country equity markets. It presents a quantitative model of trading that is built around two new assumptions: (i) both the foreign and domestic investor populations contain investors of different sophistication, and (ii) investor...

The EU15 countriesu0092 real GDP per capita levels adjusted for purchasing power converged in 1960u00962001. Convergence occurred in two spells, in 1960u009673 and 1986u00962001, with an interim period of stagnation. In this paper, we analyse both s and b convergence and discuss the impact of EU...

The study suggests that the EU's eastward enlargement will be beneficial to the new members, while most EU countries will record minor welfare gains. Poland is expected to gain 3.4% of GDP, and Hungary almost 7%. The new members will experience production increases across almost all sectors,...

Assessing existing policies or developing new policy options requires indicators showing where a community stands, where it is going and how far it is from where it wants to be. Indicators are necessary in all steps of the policy cycle: to describe the current situation/problem; to analyse the...

With very low unemployment, a large and stable current account surplus, low government debt and a budget in surplus, the Dutch economy was assessed initially to be relatively well prepared to weather the financial and economic crisis. In 2008, however, the negative effects of the financial...