We develop a model to analyze policymakers’ incentives to install policy rules, comparing the case of no rule with a binding and a contingent policy rule that allows policymakers to suspend the rule in response to a sufficiently large shock. First, abstracting from political polarization, we...

We develop a model to analyze policymakers' incentives to install policy rules, comparing the case of no rule with a binding and a contingent policy rule that allows policymakers to suspend the rule in response to a sufficiently large shock. First, abstracting from political polarization, we...

Real Exchange Rates, Structural Reforms and Monetary Union The paper addresses the question what effects the enlargement of a monetary union will have on necessary structural reforms in member countries with high and low degrees of distortions. I show that monetary union has asymmetric effects...

DIE REIHE: SCHRIFTENREIHE ZU ORDNUNGSFRAGEN DER WIRTSCHAFTherausgegeben von Thomas Apolte, Martin Leschke, Albrecht F. Michler, Christian Müller,Rahel Schomaker und Dirk WentzelDie Reihe diskutiert aktuelle ordnungspolitische und institutionenökonomische Fragestellungen. Durch die methodische...

Abstract This paper analyzes the role of trade sanctions in the pursuit of political aims. We show that sanctions are mostly ineffective and have adverse distributional consequences. The example of South-Africa, in which case several court processes are pending, serves as an illustration of this...

Abstract In his contribution Carsten Hefeker points out that most of the official arguments concerning the necessity of the Stability and Growth Pact are not convincing. Nevertheless, a mechanism that credibly avoids excessive debts and deficits is needed in most member states. It would be more...