This paper attempts to determine the extent to which common external shocks explain simultaneous currency crises. We define crises on a country by country basis using a new criterion that takes into account variations in the volatility of exchange rates over time and across countries. Using a...

Does a country's (long-term) growth depend upon what happens in countries that are nearby? Such linkages could occur for a variety of reasons, including demand and technology spillovers. We present a series of tests to determine the existence of such relationships and the forms that they might...

Does leaving a currency union reduce international trade? We answer this question using a large annual panel data set covering 217 countries from 1948 through 1997. During this sample a large number of countries left currency unions; they experienced economically and statistically significant...

This paper analyzes how a model where goods are endogenously nontraded can help explain the relationship between the current account and real exchange rate fluctuations. We formulate a small open economy two-period model in which goods switch endogenously between being traded or nontraded. The...

This paper analyzes how the feasible mix of government expenditure and financing arrangements may change in a monetary union such as that presently under discussion for the European Community. The effect of this institutional change on the incentives facing fiscal policymakers in their budgetary...

Since the fiscal expansion and real appreciation of the dollar in the early 1980s, widespread attention has focused on the so-called "deindustrialization" and "two-tiered" development of the U.S. economy. This view argues that exchange rate appreciation caused a major resource shift away from...