This chapter addresses questions about the effect of the introduction of the euro on price differentials across the Union and also on the cost of capital in its member countries, which may account for capital flows from the slow growing centre to the more buoyant peripheral states. Nominal...

This chapter compares growth in Europe and the United States in recent decades. Although Europe was, as one would expect, catching up in the 1950s and 1960s, this virtually ceased in the 1970s, and the United States has pulled further ahead in the 1980s and 1990s – and at a particularly...

This chapter argues that traditional social programmes of the modern welfare state have concentrated on replacing the earnings which are not enjoyed by those without jobs.This offers an incentive to those capable of earning only very low wages to qualify for (higher) benefits by declining jobs...

This chapter re-examines the case for reforming the Common Agricultural Policy. The health and environmental aspects of modern agriculture have been highlighted by British experience with BSE and FMD. Historically, agricultural support has been rationalised by reference to security of supply,...

Authors of the Report on the European Economy 2002

The paper formulates a model of wage determination in accordance with the notion of a monopoly union determining wages after which the firm decides on employment. The novelty is to incorporate investment and capital decisions by firms. In the theoretical part the subgame-perfect Nash equilibrium...

The paper studies empirically how different country characteristics are associated with the choice of a country's exchange rate regime. The sample consists of 140 economies, both developing and industrialized nations. When countries are classified according to their current exchange rate...

Recent models of monetary policy have analysed the desirability of different optimal and ad hoc interest-rate rules under the restrictive assumption that forecasts of the private sector and central bank are homogeneous.In this paper, we study from a learning perspective the implications of...

We investigate both the rational explosive inflation paths studied by McCallum (2001) and the classification of fiscal and monetary policies proposed by Leeper (1991) for stability under learning of rational expectations equilibria (REE).Our first result is that the fiscalist REE in the model of...