Recent evidence shows that the "home bias puzzle" in international trade maybe associated with the mere presence of national borders (McCallum (1996)). In this paper we provide a theoretical framework to explain why borders may matter so much for trade. Our argument is that even between...

This paper presents firm level evidence on the dynamics of non-manual wage premia and employment shares in Italian manufacturing during the nineties. We find that the relative stability of aggregate wage premia and employment shares hides offsetting disaggregate forces. First, while technical...

Why do we observe some LDCs objecting the prospect of a Multilateral Agreement on Investment (MAI), although they have been keen to liberalize investment in preferential agreements in recent years? In this paper, we analyse the issue of MAI implementation and assess the welfare consequences of...

The paper by Turrini and in't Veld focuses on the impact of the European fiscal rules on economic activity. Their investigation concerns euro-area countries and it is split into two steps. First, they provide an estimate of the fiscal outcomes that would have prevailed in the absence of the...

Under numerical fiscal rules, such as those underpinning EMU, governments have strong temptations to use accounting tricks to meet the fiscal constraints. Given these political incentives, fiscal variables that in the past were regarded as a mere residual acquire a strategic role. This is the...

This paper analyses the both the long and the short-run relation between government expenditure and potential output in EU countries. Having a satisfactory measurement of these relations has relevant implications for policy. From a long-term perspective, it improves the understanding of the...

The paper provides a comprehensive overview of the numerical fiscal rules in force in the 25 countries of the European Union, examines the reasons for the growing appetite for such rules, and assesses whether they have an influence on budgetary developments. The analysis is based on a new...