This paper derives and estimates rules for fiscal policy that prescribe the optimal response to changes in unemployment and debt. We combine the reducedform model of the economy from a linear VAR with a non-linear welfare function and obtain analytic solutions for optimal policy. The variables...

Sweden was hit by a severe macroeconomic crisis in the early 1990s. GDP fell for three consecutive years in 1991-1993, unemployment increased by 9 percentage points, banks had to be nationalized, and public budget deficits exceeded 10 percent of GDP. The recovery was however quick. GDP growth...

This paper empirically tests the link between trade openness and enterprise restructuring in Bulgaria. It belongs to a recent line of work in the empirical trade literature that investigates the effects of trade policy on firm behaviour. The trade liberalization following the 1991 economic...

This paper discusses the potential role of a Euro-Mediterranean Agreement (EMA) in helping Middle East and North African governments implement structural economic reforms. The arguments for and against preferential liberalization are summarized, identifying a number of necessary conditions for...

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...

We study the determination of Irish inflation between 1935 and 2012 using a Phillips curve approach. We find that a simple backward-looking Phillips Curve that incorporates import prices is stable over the sample period and passes a number of diagnostic tests. We also consider the importance of...