The object of this paper is to examine the importance of capital market assumptions. A special continuous-time model is developed in sections II-IV which is applicable to the perfect capital market case. It can also be used when there is no capital market at all (section IV). For 'reasonable'...

A combination of privatization and public-sector expenditure constraints has given rise to a substantial reduction in public-sector investment. Private ownership offers incentives for efficiency in capital investment and forms of equity finance which are particularly needed in developing...

This chapter is an assessment of the economic situation of Europe, with some concentration on those countries which have adopted the euro in 2001 and 2002 drawing on a wide variety of sources including Ifo survey data. At 1.6% in 2001 and 1.3% in 2002, these GDP growth rates are both, lower than...

This chapter addresses the weakness of the euro against the US dollar and the yen since its launch in 1999. The report stresses the effects on the euro of a dramatic decline in the demand for base money which probably reflected a flight of black money from within the euro countries as well as of...

This chapter considers the monetary and fiscal policies appropriate to Europe under the circumstances of an adverse international cycle and a weak euro. Typically, governments have medium-term plans for fiscal consolidation, “stabilisation plans”, calling for a falling trend in budget...