Assuming that economic reforms are successful in Eastern Europe, what will be the effects on Western Europe? The focus is on the wage pressure that the threat of migration from East to West is likely to impose. The paper adopts a Ramsey model of intertemporal choice, for both individuals and...

This paper explores the link between trade and European labour markets by using evidence on relative commodity prices and intra-sectoral skill levels at the NACE three-digit level for the four large EC countries and for the period 1976–90. We find that if the relative import prices of...

We analyze a two-country zone facing a joint inflationary shock and responding with coordinated and uncoordinated monetary and fiscal policies. We show that the standard presumption that the absence of coordination results in an excessive exchange rate appreciation of the zone with respect to...

Real exchange rates appear to present a specific behaviour in the early phase of transition: they are largely unaffected by nominal exchange rate movements and exhibit trend appreciation. The model presented here describes the transition process as the emergence of two new (traded and non-traded...

In the real world of less than perfect markets, balancing the benefits and costs of financial liberalization is usually impossible ex ante. Having been slow to liberalize, postwar Europe offers a possible testing ground. Looking at the experience in Belgium, France and Italy, a number of...

This paper provides evidence on the effects of capital controls. We show that controls have been associated with significant differences in macroeconomic behaviour, especially in monetary policy. While they have not prevented speculative attacks, they have provided the breathing space needed to...

The purpose of this paper is to establish some stylized facts on gross labor market flows - using mostly new data from France, Germany, the United Kingdom and the United States - which any theory of unemployment ought to explain. The regularities on gross labor market flows that we isolate are...

The present paper extends the literature on central bank transparency that relies on information heterogeneity among private agents in four directions. First, it adds the interest rate to the list of signals that the central bank can reveal. Second, it allows for more than one economic...

Can Europe's post-war experience with fixed exchange rates be useful for today's emerging market countries? A new conventional wisdom suggests that the answer is negative, that in today's world of huge capital flows the only choice is between freely floating exchange rates and hard pegs. The...

Several alterantive scenarios for the economic integration of East and West Germany are analysed. They all share an amphasis of the rile of migration and labor mobility in this process. The effects of congestion costs, rigid wages, human capital and heterogeneity of migrants, and endogenous...