This paper argues that in the presence of distortions and market imperfections it may be rational for governments to monitor short-run fluctuations of the external account in order to anticipate and therefore avoid difficulties, even though the true external constraint is binding only in the...

This paper provides a conceptual framework to analyze the main economic issues raised by Spain's integration into the EEC and by the vast economic reforms associated with the 1992 European Internal Market. The "EEC cum 1992" event can be described as a major anticipated permanent shock with both...

This paper addresses a number of questions which are essential to a proper understanding of the causes and effects of the inflationary process and to an assessment of the contribution of monetary policy to the achievement of long-term price stability. These questions are: (1) what are the...

One of the most striking macroeconomic phenomena in recent decades has been the achievement of rather low and more stable rates of inflation in many countries. Consequently, the main goal of this Paper is to offer an overview of the main policy issues arising in a low inflation environment and...

In this paper we analyse the likely effects of Economic and Monetary Union (EMU) on European unemployment. We start by describing the current unemployment situation in the European Union (EU). In so doing, we try to assess the relative importance of European, national and regional shocks in...

This paper provides empirical evidence on the effectiveness of movements in nominal exchange rates in smoothing cyclical imbalances between countries, as explained by the literature on optimal currency areas. We use restrictions from the Mundell-Flemming model (on which the theory of optimal...