In this paper, we innovatively apply both Taylor rule, where an interest rate is used as a policy reaction, and McCallum rule, where monetary base is considered as a policy instrument, for the new EU member states in analysing monetary policy reaction functions. For the Czech Republic, Poland,...

This paper investigates the interaction between migration and the European Union (EU) labour market. The study runs Granger causality tests using panel data on 13 of the original EU countries. As predicted by theory, the modelling unveils a negative relationship among unemployment and migration....

This paper discusses the potential benefits of monetary policy rules for transition economies [TEs]. It is argued that the nominal interest rate may fail to be the appropriate instrument in such rules. One reason is the amount of non-calculable political and economic risk inherent in TEs. These...

Recently, the European Union [EU] expanded to include ten Central and Eastern European countries [CEEC]. The United Kingdom [UK] is gradually opening its labour markets to countries that have joined the EU. This paper examines some of the causes and consequences of growing immigration from CEEC...

We study the effects of preferential trade agreements (PTA) in a model where income matters for consumption patterns. We develop a three-country Ricardian trade model in which goods are ranked according to priority and where economies differ in their income level. The poorest (richest) country...

Understanding what determines Foreign Direct Investment (FDI) inflows remains a primary concern of economists and policy makers; yet, the uncertainty surrounding FDI theories and empirical approaches has created much ambiguity regarding the determinants of FDI. This paper undertakes an...

Ten years after its introduction, the Euro is in an existential crisis. The crisis is the outcome of economic policies that have aimed at labour market flexibility and financial integration. The paper argues, firstly, that the aggregate demand regime in the Euro area is wage led. While an...

Logit models are non-linear in their explanatory variables. Derivatives with respect to the explanatory variables therefore only approximate the response to discrete changes in regressor values, yet have gained some support within the literature. This note investigates such an approximation...

This paper studies a dynamic error correction model (ECM) highlighting the consequences of regime changes and of credibility on the performance of real exchange rates during stabilization. The analysis shows that the structural parameters of the ECM, from which an equilibrium real exchange rate...

In many countries, firms are encouraged to export as a means of contributing to economic growth. The successes of small and medium-sized enterprises (SMEs) in industrialized countries has led to the increasing recognition of their role in transition economies - including exports development. The...