More than eight years after the introduction of the euro, impacts on developing countries have been relatively modest. Overall, the euro has become much more important in debt issuance than in official foreign exchange reserve holdings. The former has benefited from the creation of a large set...

Frontmatter -- Contents -- Preface -- Acknowledgments -- I . Trade, Tariffs, And Welfare -- Nature, Capital, and Trade / Kenen, Peter Β. -- Toward a More General Theory of Capital and Trade / Kenen, Peter Β. -- Distribution, Demand, and Equilibrium in International Trade: A Diagrammatic...

In this paper we demonstrate that exchange rate regime switching is compatible with optimal government policies. Nominal exchange-rate regimes are formalized as equilibrium commitments on future seigniorage policies, and the collapse of an exchange-rate peg as an excusable default which allows...

A common argument against either a monetary union or a regime or a fixed exchange rates is that they preclude flexible use of the inflation tax. The authors address this point of view by comparing three alternative exchange rate regimes: a pure float, an EMS-regime in which the exchange rate is...

This paper presents a two-country extension of Lucas' (1988) work on the effects of cash-in-advance constraints in asset markets on the pricing of financial assets. The model is one where there exists some degree of separation between the goods markets and the asset markets and money is used for...

This paper investigates the effectiveness of the monetary authority's borrowing policies in resolving exchange rate crises. It shows why obtaining loans or lines of credit in foreign currency may avoid, at least temporarily, the devaluation of a fixed exchange rate, and discusses the problem of...

This paper addresses two questions: (1) Is a twelve country monetary union in Europe feasible; (2) Can monetary union be achieved at multi-speed, i.e., with a rust group of countries going first, and later admitting the others? After examining several politico-economic arguments concerning...