This paper studies the design and effects of monetary and fiscal policy in the euro area. To do so, a stylized two-region model of monetary and fiscal policy rules in the EMU is built. We analyse how monetary and fiscal rules affect the adjustment dynamics in the model. Both the effects on the...

The evolution of city growth is usually studied for relatively short time periods. The rise and decline of cities is, however, typically a process that takes many decades or even centuries. In this article we study the evolution of Italian cities over the period 1300–1861. Using an existing...

This paper analyses the accession to the Euro-Area by new members using a stylized new-Keynesian model. We analyze macro-economic adjustment in the pre- and post accession case and calculate welfare in both situations to obtain net benefit/loss from accession. It is shown how the effects of...

Many modern trade and growth models are characterized by multiple equilibria. In theory the analysis of multiple equilibria is possible, but in practice it is difficult to test for the presence of multiple equilibria. Based on the methodology developed by Davis and Weinstein (2004) for the case...

The physical or absolute geography of Sub-Saharan Africa (SSA) is often blamed for its poor economic performance. A country’s location however not only determines its absolute geography, it also pins down its relative position on the globe vis-à-vis other countries. This paper assesses the...

Trade costs are a crucial in new economic geography (NEG) models. The unavailability of actual trade costs data requires the approximation of trade costs. Most NEG studies do not deal with the ramifications of the particular trade costs specification used. This paper shows that the specification...

The 2008 Nobel prize for economics was awarded to Paul Krugman for three papers -Krugman (1979, 1980, 1991). In this paper we illustrate that, indeed, these three papers are closely connected. We present - a summary of - the papers using a unified framework. Central in the discussion is the...