The Stability and Growth Pact is under fire. Problems have appeared in sticking to the rules. Proposals to reform the Pact or ditch it altogether abound. But is the Pact a flawed fiscal rule? Against established criteria for an ideal fiscal rule, its design and compliance mechanisms fare...

The recent growth of regional integration agreements (customs unions and free-trade areas) has been accompanied by a mounting concern for the health of the multilateral trading system. Much of this concern stems from the generally accepted view that the current WTO rules do not provide an...

This paper reviews the prerequisites of inflation targeting, analyses the extent to which they are met in Egypt and examines whether the Egyptian economy, under its current status, is ready to formally adopt an inflation targeting regime. It discusses why developing strong fiscal, financial and...

A stable and predictable demand for money function is a pre-requisite for the use of targets for monetary aggregates as a suitable intermediate objective of monetary policy. In spite of the clear difficulties which have manifested themselves in the estimation of such money functions, empirical...

The purpose of this paper is to provide a consistent and transparent theoretical and empirical framework to analyse real effective equilibrium exchange rates for a large number of industrial countries. The theoretical and empirical model, as well as the applied methodology, are closely related...

The essay sets out what product market reforms are, as well as the main measurement issues, followed by an analysis of how such reforms lubricate adjustment processes in EMU, in particular via the “competitiveness channelâ€. Attention is paid to the short-run and longer-run aspects of...

This paper investigates the impact of globalization and integration on the relative benefits of country and industry diversification. Unlike previous models, our factor model allows asset exposures to vary with both structural changes and temporary fluctuations in the economic and financial...

This paper describes the endogenous growth version of the QUEST III model and uses it to analyse the macroeconomic impact of various structural reform measures. This paper describes a micro-founded DSGE model with endogenous growth that is used to analyse the macroeconomic impact of structural...

There is a general consensus that monetary stability in Economic and Monetary Union (EMU) requires sustainable public finances of the member states. But how can a sufficient degree of budgetary discipline be maintained in Stage three of EMU?To answer this question, this study provides an...

This paper shows that the efficiency in public services more generally and in public spending on education and R&D in particular varies significantly between countries. The paper, however, also illustrates the difficulties of measuring efficiency and effectiveness. Progress has been made in...