Many resource-rich countries have poor economic performance and suffer from negative genuine saving rates, especially if they have many rival factions and badly functioning legal systems. We attempt to shed light on these stylized facts by analyzing a power struggle about the control of natural...

The Ramsey-Romer model of endogenous growth is extended to allow for holdings of real money balances and government debt as well as capital and for non-interconnected generations of households. Tax-financed increases in government consumption and debt depress growth prospects and boost...

In this paper we evaluate the deterioration in the European sacrifice ratio implied (both in terms of inflation and unemployment) by the fact that labour markets are structurally different and there is very little labour mobility between the European Union countries. We also consider a wage...

The theory of optimal currency areas states that a single currency zone should have symmetry of shocks and structures across regions. Research on monetary union in Europe has either assumed these conditions to hold close enough not to cause problems, or has focussed on asymmetries in shocks. But...

The macroeconomic effects of different ways of rolling back the welfare state are analysed. Cutting public spending on market goods induces a lower interest rate, a higher wage, a lower capital stock and a fall in employment. Cutting public employment or the labour income tax rate leads, in...

Commodity stabilisation agreements have often been suggested as a means of stabilising producers' revenues and redistributing productive resources to less developed economies (from "North" to "South"). But no empirical estimates of how much may be expected from such agreements, nor of what they...

The harshest criticism of econometrically based policy evaluation is undoubtedly the sensitivity of its conclusions to assumptions concerning the information available to policy-makers or to misspecification of the econometric models used in the evaluation. Economists appear to have accepted...

This paper employs the recursive utility approach, based on quadratic felicity functions and constant absolute risk aversion, to distinguish between risk aversion and intertemporal substitution. Stochastic dynamic programming yields closed-loop linear decision rules for the CARA-LQ problem....

This paper analyses four costs which may be associated with monetary union. First it (obviously) allows no `relative' monetary accommodation of the kind which may assist when dealing with asymmetric shocks. This can impose significant adjustment costs. Second it does not of itself prevent...

A two-country, intertemporal, perfect-foresight model with micro foundations, Cobb-Douglas preferences and technologies, floating exchange rates, uncovered interest parity,and nominal wage rigidities is formulated. The transient and steady-state effects of a joint and unilateral monetary...