We model an accession country facing a Maastricht-type inflation criterion that specifies an inflation ceiling. In addition to deciding whether or not to satisfy this criterion, the country must decide how much costly economic reform to undertake. If the country puts enough weight on the future...

Books reviewed: Finis Welch (ed.), The Causes and Consequences of Increasing Inequality S. Togan and V. N. Balasubramanyam (eds.), Turkey and Central and Eastern European Countries in Transition Towards Membership of the EMU Yair Mundlak, Agriculture and Economic Growth: Theory and Measurement...

This paper attempts to explore the underlying causes of twin crises experienced by Turkey in November 2000 and February 2001. We study an extensive set of leading indicators of crises that are drawn from the existing literature. Our results identify three sets of vulnerabilities in the Turkish...

The recent global financial crisis was the first in recent history that was triggered by problems in the financial system of the mature economies. Existing work on financial crisis in emerging market countries, however, almost exclusively focus on the role of financial frictions in the domestic...

Existing models of speculative attacks and balance of payments crises do not provide a good explanation for the breakdown of the ERM in 1992/93. This paper presents an alternative model which captures some of the important features of that period. The switch from a fixed to a floating rate...

This paper models the behaviour of a potential entrant into a monetary union where there is an inflation entry condition. In addition to making a monetary policy decision during a qualifying period, the potential entrant must make a decision about structural reform. The paper shows that the...