This paper presents a two-country extension of Lucas' (1988) work on the effects of cash-in-advance constraints in asset markets on the pricing of financial assets. The model is one where there exists some degree of separation between the goods markets and the asset markets and money is used for...

This paper analyses Krugman's contention that there is a `gold standard paradox' in the speculative attack literature. The paradox occurs if a country's currency appreciates after it runs out of gold or equivalently if a speculative attack can happen only after the country `naturally' runs out...

This paper addresses two questions: (1) Is a twelve-country monetary union in Europe feasible? (2) Can monetary union be achieved in stages, i.e. with an initial group of countries going first, and later admitting the others? After examining several politico-economic arguments concerning...

Dieses Werk tritt im deutschsprachigen Raum die Nachfolge von Barros Makroökonomie an. Inhaltlich entspricht es der vierten Auflage von Barros Makroökonomie im amerikanischen Original. Diese wurde aber auf die europäische Perspektive hin und im Bereich der europäischen Institution...

This paper addresses two questions: (1) Is a twelve country monetary union in Europe feasible; (2) Can monetary union be achieved at multi-speed, i.e., with a rust group of countries going first, and later admitting the others? After examining several politico-economic arguments concerning...

This paper investigates the effectiveness of the monetary authority's borrowing policies in resolving exchange rate crises. It shows why obtaining loans or lines of credit in foreign currency may avoid, at least temporarily, the devaluation of a fixed exchange rate, and discusses the problem of...

In this paper we demonstrate that exchange rate regime switching is compatible with optimal government policies. Nominal exchange-rate regimes are formalized as equilibrium commitments on future seigniorage policies, and the collapse of an exchange-rate peg as an excusable default which allows...

This paper considers the likely effect on the automobile industry of a free trade agreement between the U.S. and Mexico. As there are currently large restrictions on imports into Mexico, one important outcome of a free trade agreement would be the opening of the Mexican market to U.S. producers....