In this paper we argue, first, that the Maastricht-inspired policy mix of monetary and fiscal restriction applied during the first half of the 1990s is, to a significant extent, responsible for the build-up of both the unemployment rate and the government debt to GDP ratios on the European...

The Maastricht Treaty and the Madrid Council decision severely restrict the choice of the euro conversion rates. In practical terms the authorities can only select the Ecu rates prevailing in the market the day before conversion. The market will lack a fixed point, however, so that infinite...

Building on the needs for long term capital inflows in developing countries, this paper reconsiders the choice of an exchange-rate regime by integrating the determinants of multinational firms locations. The trade-off between price competitiveness and a stable nominal exchange rate is modeled....

This paper evaluates the possible problems in formulating macroeconomic policy as participating Member States proceed to adopt a single currency , and considers policy coordication and objectives , seigniorage, cohesion and dynamic economic and political considerations during the transition period.

The irrelevance of expenditure shocks to nominal product in the Mundell-Fleming model disappears once "real balances" are taken to mean the nominal money stock deflated by the consumer price index, rather than the GDP deflator. Under this alternative definition of real balances there is a...