There are two main schools of thought which seek to explain currency crises; fundamentalist theories (Krugman, 1979) and speculative theories (Obstfeld, 1986). However, neither of these approaches considers the duration of a currency crisis. I explain the duration of a crisis in terms of a war...

The European Union (EU) constitutes a particular and novel economic framework. More than half of her member countries form a monetary union, whereas the rest keep their national monetary policies. Regarding the external sector, the EU economies exhibit a high degree of openness and the European...

Long-term real interest rates across the world have fallen by about 450 basis points over the past 30 years. The co-movement in rates across both advanced and emerging economies suggests a common driver: the global neutral real rate may have fallen. In this paper we attempt to identify which...

In order to add realism to the war of attrition model and explain high inflation experiences of countries such as Turkey, Argentina and Brazil, one needs to consider the crucial role played by political elites. In countries with weak institutions and social interest groups, it is rather...

Currency crises are usually associated with large nominal and real depreciations. In some countries depreciations are perceived to be very costly ("fear of floating"). In this paper we try to understand the reasons behind this fear. We first look at episodes of currency crises in the 1990s and...

This paper distinguishes between two components of government consumption, expenditure on final goods and expenditure on hours, and compares the effects of changes in these two on the current account. I find that changes in government expenditure on hours do not directly affect the current...

This is a Comment on the Transformation of a Socialist Economy: Lessons of German Unification. It focuses particularly on what was known and what was unknown (or unknowable) at the start of the unification process and on common errors in the criticism of the the exchange rate decisions

The effects of the oil price shocks of the 1970s were critically contingent on the domestic arrangements that determined the incidence of the shocks--specifically whether labor income or capital income bore the brunt. This differed between the two shocks in some countries and differed between...

The paper focuses on the relation between economic crisis and competitiveness of the economy. The Baltic States (Estonia, Latvia and Lithuania) experienced the biggest GDP contraction during the global crisis. Since then, identifying and assessing changes in the relative competitiveness as a...

The standard model of signaling used in open economy macroeconomics concentrates on building a reputation when a policymaker's `type' is unknown. Observing tough policy leads market participants to raise the probability that a policymaker is tough, and therefore to expect tough policy in the...