Inertial factors are one the main reasons for the persistence of inflation and the high output losses of disinflation. However the removal of these factors can be costly in terms of popularity for the government : for example, unions may resist the reduction of lagged wage indexation. In this...

The paper examines cases in which from a production efficiency standpoint "big bang" programs are superior to gradualist programs. Nevertheless, in the presence of (I) uncertainty about the exogenous shocks, (ii) dependence of policy actions on the state of the economy, and (iii) uncertain...

It has long been recognized that contemporaneous wage indexation stabilizes output and employment in the face of monetary shocks, but hampers the adjustment of the economy to real shocks that require changes in the real wage. Another feature of wage indexing is that it reduces the incentive of...

The corporate governance problem of state enterprises in formerly centrally planned economies can give rise to excess wage claims and/or capital decumulation if workers and managers try to appropriate the firm''s assets before it is "commercialized" or privatized. Since state enterprises still...

Recent theoretical development in closed-economy macroeconomics are extended to open economies to investigate the dynamics of the current account of the balance of payments and the effects of fiscal policies.

Economists tend to favor the free �ow of capital across national borders, because it allows capital to seek out the highest rate of return. Unrestricted capital �ows may also o¤er several advantages, as noted by Feldstein (2000). First, international �ows reduce the risk faced by owners...

Covering a full array of topics in open economy macro and public economics, Fiscal Policies and Growth in the World Economy has been thoroughly revised and extended. The added material in this new edition includes stochastic rational-expectations extensions of the Mundell-Fleming model, the...

Book delves with the puzzle that assets play important role in the theory of international finance but hardly any any role in the theory of international trade. Where this dichotomy comes from? Main feature is that trade in assets may interact in an important ways with trade in goods and...

Covering a full array of topics in open economy macro and public economics, Fiscal Policies and Growth in the World Economy has been thoroughly revised and extended. The added material in this new edition includes stochastic rational-expectations extensions of the Mundell-Fleming model, the...

The ongoing process of increased integration of national economies, culminating in the single European market of 1992, still leaves as virtually separate the national fiscal systems. In this book international economists Jacob Frenkel and Assaf Razin join forces with public finance economist...