The well-known question whether regional trade agreements (RTAs) and the multilateral trading system (MTS) are strangers, friends, or foes (Bhagwati and Panagariya, 1996) has gained new importance with the widespread proliferation of RTAs in recent years. Based on an extensive data set which...

The paper discusses the stabilizing potential of fiscal policy in a dynamic general-equilibrium model of monetary union. We consider a small open economy inside the currency area. We analyze the demand and supply effects of direct taxation, indirect taxation and government spending and derive...

In the literature on currency and banking crises it has become the standard procedure to distinguish pure currency crises, pure banking crises and combined ('twin') currency and banking crises. We show theoretically and empirically that a similar differentiation should be chosen with regard to...