This paper studies regimes of managed exchange rates for a small open economy with an integrated capital market, rational expectations in financial markets, sluggish nominal wages and prices, and supply shocks that follow a Brownian motion. Each regime can be characterized by the degree to which...

Inspired by current European developments, we study equilibrium fiscal policy under alternative constitutional arrangements in a `federation' of countries. There are two levels of government: local and federal. Local policy redistributes across individuals and affects the probability of...

This paper uses a computable general-equilibrium model of intertemporal demand to investigate the impact of market integration after 1992 on financial services and economic welfare in the European Community (EC). In contrast to previous work, it assesses the impact of `1992' on the demand for...

The demise of the CMEA trading system in 1991 and the shift to convertible currency settlements and world market prices was expected to bring about a severe contraction of intra-group trade, coupled with large imbalances in trade between Eastern Europe and the former Soviet Union. The observed...

One of the important neglected issues in discussions of East European transition to the market is the structure of the government's budget, especially the roles played by taxes and subsidies. This paper reviews the Hungarian fiscal situation in 1990, the most recent year for which reasonably...

The paper identifies the potential sources of allocative inefficiency generated by the Multi-Fiber Agreements (MFA) and examines the evidence for such inefficiencies. Five sources of inefficiency are identified relating to inefficient allocations across countries, across consumers, and among...

East European countries have experienced sharp declines in real GDP since 1990. One of the reasons for this decline is the Soviet trade shock caused by the collapse of the CMEA and of traditional export markets in the Soviet Union. This paper is an attempt to quantify the magnitude of this...

By the end of 1991, Czechoslovakia, Hungary and Poland had achieved a substantial degree of openness to foreign trade. In all three countries, trade is now demonopolized and licensing and quotas play a very small role. Exchange controls have virtually disappeared for current-account...

This paper reviews estimates of the effects of `1992' on international trade and welfare, and the policy implications of those estimates. It surveys earlier research starting with the Cecchini Report of 1988 and then summarizes some new results based on general equilibrium modelling with...

We use time-series methods to estimate a simple aggregate supply and demand model in order to analyse the comparative performance of fixed and flexible exchange rate systems and test competing hypotheses designed to explain shifts between exchange rate regimes. The paper provides a coherent...