This paper presents a market with asymmetric information where a privately revealing equilibrium obtains in a competitive framework and where incentives to acquire information are preserved. The equilibrium is efficient, and the paradoxes associated with fully revealing rational expectations...

The paper analyzes a very stylized model of crises and demonstrates how the degree of strategic complementarity in the actions of investors is an important determinant of fragility. It is shown how the balance sheet composition of a financial intermediary, parameters of the information structure...

This paper performs a welfare analysis of economies with private information when public information is endogenously generated and agents can condition on noisy public statistics in the rational expectations tradition. Equilibrium is not (restricted) efficient even when feasible allocations...

The paper analyzes a very stylized model of crises and demonstrates how the degree of strategic complementarity in the actions of investors is an important determinant of fragility. It is shown how the balance sheet composition of a financial intermediary, parameters of the information structure...

This paper performs a welfare analysis of economies with private information when public information is endogenously generated and agents can condition on noisy public statistics in the rational expectations tradition. We find that equilibrium is not (restricted) efficient even when feasible...

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 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 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,...

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 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...