The increased mobility of capital of the last few decades creates new challenges for the macroeconomic policies of the nation-states. In this paper we analyse some of these challenges. Contrary to what is often alleged, increased capital mobility does not necessarily increase the need for...

<i>Exchange Rates and Global Financial Policies</i> brings together research and work done by world-class economist Paul De Grauwe over the past two decades. Drawing inspiration from behavioural finance literature, De Grauwe covers topics such as exchange rate economics, monetary integration (with...

The Political Economy of Monetary Union presents an important collection of the most influential articles covering different areas in this expanding field.

We test the hypothesis that the government bond markets in the Eurozone are more fragile and more susceptible to self-fulfilling liquidity crises than in stand-alone countries. We find evidence that a significant part of the surge in the spreads of the PIGS countries in the Eurozone during...

The growth rate of international trade among industrial countries has declined by more than half since the inception of floating exchange rates. To explain the slowdown, the effects of exchange rate volatility are separated from those of other shocks since 1973--in particular, changes in oil...