The European Monetary Union (EMU) got under way on 1 January 1999. Since then 11 European countries share a common currency, the Euro, and pursue a common monetary policy managed by the European Central Bank (ECB). After forty years of economic integration, Europe has the wherewithal with which to enter the 21st century. However monetary union has implications for nearly all areas of economic activity and decision-making. Throughout the academic world researchers are fully occupied with the theoretical analysis of the impact of the Euro and the effects of incorporating the new operational framework into their economic models. Businesses and government departments are concerned primarily with the practical implementation of the single currency. For all those who play a part in the economy, it is a question of making the most of the macro and microeconomic opportunities offered by the Euro and minimizing any threats. The Economic and Business Consequences of the EMU describes the economic consequences of the introduction of the EMU and the Euro for governments, financial institutions and firms. The volume, s aims are threefold: To make a first assessment after about a year=s experience with Economic and Monetary Union; To examine the impact of EMU and the introduction of the Euro in various areas of economic policy, involving both government and the corporate sector including the banking industry; To provide an insight into the challenges that the Euro offers for the coming years with respect both to macro-economic policy and the development of the financial markets and with respect to business management.

In a single volume, this book treats the theoretical, empirical, and case studies approaches to the implementation of monetary reforms and discusses specific countries' experiences with these approaches. The analyses are not restricted to central bank or exchange rate reforms, but consider all the principal tools of monetary reforms in this volume. The first section surveys and examines the types of monetary reforms. The second and third sections examine the pros and cons of exchange rate management and central bank independence. The final section of the book presents case studies on monetary and central bank experiences in Germany, the United States, Canada and Hungary.

This book studies the causes and cures of inflation in a monetary union. It carefully discusses the effects of money growth and output growth on inflation. The focus is on producer inflation, currency depreciation and consumer inflation. For instance, what determines the rate of consumer inflation in Europe, and what in America? Moreover, what determines the rate of consumer inflation in Germany, and what in France? Further topics are real depreciation, nominal and real interest rates, the growth of nominal wages, the growth of producer real wages, and the growth of consumer real wages. Here productivity growth and labour growth play significant roles. Another important issue is target inflation and required money growth. A special feature of this book is the numerical estimation of shock and policy multipliers.

ical) and to self-fulfilling currency crisis, respectively. Research stressing the former approach was pioneered by Krugman (1979) and Flood and Garber (1984). According to this line of research, the failure of governments to adopt domestic monetary and fiscal policies consistent with their stated exchange rate targets leads to a gradual diminution of reserves and eventually a stock adjustment that depletes reserves suddenly in one attack (Sachs, Tornell, and Velasco, 1996, page 47). The result is either a devaluation of the exchange rate or a switch to floating. Subsequent work of this genre has specified a number of other channels, in addition to that involving inconsistent and unsustainable monetary and fiscal policies, that can precipitate an attack: 1. Inconsistency between external and internal objectives. The stances of monetary and fiscal policies may be consistent with the authorities' exchange rate target, but domestic economic indicators (such as the unemployment rate) may be inconsistent with internal balance, resulting in pressures on the authorities to relax macroeconomic policies. Private agents, aware of this inconsistency, perceive an opportunity for profits from a currency devaluation and precipitate an attack. 2. Contagion effects. Prior to an attack on another currency (say that of country B), the market may view a country's (say, country A's) exchange rate as consistent with economic fundamentals and, thus, sustainable.

Procyclicality of the financial system is a feature of any normally functioning economy. However, procyclicality can sometimes become 'excessive' leading to undesired effects on the real economy. The challenge that this volume addresses is to define 'excessive' and to identify policy actions that could produce superior outcomes.

This book analyzes the revenues from the creation of currency by a central government. Adopting an institutional perspective, it develops a general theory of seigniorage by identifying three monetary regimes in economic history and the history of economic thought: a commodity currency, a fiat currency and a credit currency regime. As such it provides a modern analytical framework to analyze the nature of revenues from the creation of currency and their optimal height, whether currency is issued by means of minting coins, by printing and spending paper notes, by crediting private entities, or combinations thereof. The results of this analysis stretch beyond the immediate topic. The book establishes a relationship between the theory of seigniorage and government debt, the theory of the interest rate, the optimal rate of inflation, or the effectiveness and inflationary limits of outright monetary transactions.

The CFA Franc Zone in West and Central Africa represents the largest monetary union in the southern hemisphere, predating the European Monetary Union by decades. This book analyzes the recent economic experiences of the Franc Zone's member states and of its economic institutions. It pays particular attention to the way this disparate group of countries exploit the advantages and manage the costs of adhering to a single currency. It also analyzes the impact Franc Zone institutions have on poverty.

The bulk of this volume deals with the four main aspects of risk management: market risk, credit risk, risk management - in macro-economy as well as within companies. It presents a number of approaches and case studies directed at applying risk management to diverse business environments. Included are traditional market and credit risk management models such as the Black-Scholes Option Pricing Model, the Vasicek Model, Factor models, CAPM models, GARCH models, KMV models and credit scoring models.

Having the high unemployment in Germany in mind, this book discusses how macroeconomic theory has evolved over the past forty years. It shows that in recent years a convergence has taken place, with modern models embodying a Keynesian transmission mechanism, monetarist policy implication, and modeling techniques inspired by new classical economics and real business cycle theory. It also probes in which direction models may be extended from here. Empirically, the book uses different econometric techniques to investigate the relevance and implications of different macroeconomic theories for German data. A key question this book investigates is the role of demand and supply side conditions for the increase in the German unemployment rate. On a policy level, the book relates the implications of the different theories to the ongoing debate on the appropriate roles of demand and supply side policies for curing the German unemployment problem.

On 1 May 1967 Dr. J elle Zijlstra was appointed President of De Nederlandsche Bank, after an already eventful career. Following a brief spell as Professor of Economics at the Free University of Amsterdam, he began a lengthy period of ministerial service in 1952. During his cabinet years, he devised a concept which became known in the Netherlands as the' Zijl- stra norm', and which was aImed at keeping the Government's financial deficit in check. He concluded his active political career .as prime minister in 1966-1967. Dr. Zijlstra's career as a politician and central banker covered a period of nearly 30 years during which the economic scene in the N ether- lands and in the world underwent wide cyclical ups and downs and impor- tant changes of a more long-lasting nature. Successful economic recovery after the Second World War was followed by a period of rapid and rela- tively stable economic growth. However, as early as the 1960s the condi- tions for the maintenance of equilibrated expansion became less secure. These conditions were further impaired in the 1970s partly as a result of important shocks, such as the oil crises.

This textbook gives a comprehensive introduction to stochastic processes and calculus in the fields of finance and economics, more specifically mathematical finance and time series econometrics. Over the past decades stochastic calculus and processes have gained great importance, because they play a decisive role in the modeling of financial markets and as a basis for modern time series econometrics. Mathematical theory is applied to solve stochastic differential equations and to derive limiting results for statistical inference on nonstationary processes. This introduction is elementary and rigorous at the same time. On the one hand it gives a basic and illustrative presentation of the relevant topics without using many technical derivations. On the other hand many of the procedures are presented at a technically advanced level: for a thorough understanding, they are to be proven. In order to meet both requirements jointly, the present book is equipped with a lot of challenging problems at the end of each chapter as well as with the corresponding detailed solutions. Thus the virtual text - augmented with more than 60 basic examples and 40 illustrative figures - is rather easy to read while a part of the technical arguments is transferred to the exercise problems and their solutions.

Written during the early 1920s, at a time when Europe was still recovering from the catastrophe of the First World War, L.V. Birck's The Scourge of Europe examines the economic issues surrounding the existence of public debt, its history, and possible approaches to problems associated with public debt as they were being pursued by the great powers of the time. Birck's analysis contains a rigorous theoretical exposition and explanation of public debt as it was understood in the crucial period leading up to the Great Depression. This is then followed by an insightful exploration of the role of public debt in European financial and economic history. Finally, some reflections on the policies of England, the United States, France and Germany in the latter part of the nineteenth and early-twentieth centuries are included. This book will appeal to economic and financial historians, as well as to those generally interested in European policies towards debt from the Middle Ages to modern times.

Examines the policy of conditionality and cross-conditionality, which international institutions like the International Monetary Fund and World Bank apply to grant loans to developing countries. The explosion of conditionality has become a key issue in international relations since the mid-1980s. This book presents six detailed country studies on the issue, written by distinguished academics and/or senior policy makers, from these countries. The countries featured include Argentina, Chile, Costa Rica, Jamaica, Mexico and Tanzania and conclusions and policy lessons are drawn from these.

This book explores the scope and limits of macroeconomic policy in a monetary union. The focus is on pure policies, policy mixes, and policy coordination. The leading protagonists are the union central bank, national governments, and national trade unions. Special emphasis is put on wage shocks and wage restraint. This book develops a series of basic, intennediate, and advanced models. A striking feature is the numerical estimation of policy multipliers. A lot of diagrams serve to illustrate the subject in hand. The monetary union is an open economy with high capital mobility. The exchange rate between the monetary union and the rest of the world is floating. The world interest rate can be exogenous or endogenous. The union countries may differ in money demand, consumption, imports, openness, or size. Previous versions of some parts were presented at the Annual Conference of the Gennan Economic Association and . at the Workshop on International Economics. I have benefited from comments by Christopher Bliss, Volker Clausen, Johannes Hackmann, Bernd Hayo, Jay H. Levin, Reinar Ludeke, Dirk Meyer, Jochen Michaelis, Franco Reither, Gerhard Rubel, WolfScMfer, Michael Schmid, Reinhard Selten, Hans-Werner Sinn, Sylvia Staudinger, Thomas Straubhaar, Bas van Aarle, and Artur Woll. In addition, Michael Brauninger and Michael Cyrus carefully discussed with me all parts of the manuscript. Last but not least, Doris Ehrich did the secretarial work as excellently as ever. I wish to thank all of them. Executive Summary 1) The monetary union as a whole. First consider fiscal policy.

Providing an up-to-date account of Modern Monetary Theory (MMT) with contributions from the world's leading experts, each chapter offers new insights on the topic, building upon MMT's established body of work. This innovative book analyses key economic issues from a wide set of regions including the UK, Europe and the Global South, addressing previous concerns that MMT is too US-focused. Alongside ground-breaking research written by MMT's original developers and leading academics, the book also includes contributions from economic historians and public policy campaigners, highlighting how MMT contributes to challenging neoliberalism and the hegemony of mainstream macroeconomics. Offering an examination of the existing legal, institutional and policy framework which governs the UK Exchequer in particular, it examines how the central claims of MMT map onto the financial activities of the UK government. This will be key reading for undergraduate and postgraduate economics students, as well as more advanced scholars of the discipline, particularly for those looking into theories of finance, money and banking. It will also have a wider appeal across the social sciences, including politics and sociology students.

Sebastian Dullien gives a novel explanation for unemployment and inflation in the Euro-Zone. He argues that unemployment stems from a lack of cooperation between unions and monetary authorities: In an economy with endogenous money as EMU, wage setters are responsible for price stability while the central bank is responsible for the level of output. Cooperation between both actors is necessary for high employment and low inflation. The current institutional set-up is found to be unable to assure cooperation.

Essays on Money, Banking and Regulation honors the interests and achievements of the Dutch economist Conrad Oort. The book is divided into four parts. Part 1 - Fiscal and monetary policy - reviews a variety of topics ranging from the measurement of money to the control and management of government expenditures. Part 2 - International institutions and international economic policy - looks at the international dimension of monetary and fiscal policy, with extensive discussion of the International Monetary Fund and the European Monetary Union. Part 3 - The future of international banking and the financial sector in the Netherlands - is an insider's view of the strategic choices facing financial institutions in the near future. Finally, Part 4 - Taxation and reforms in the Dutch tax system - is closest to Oort's research and practice since he has become known as an architect of the 1990 Dutch tax reform; this part is dedicated in particular to the tax reforms suggested by Oort.

International Monetary Cooperation among the United States, Japan, and Germany offers a first - and overdue - book- length study of counterproductive cooperation. It takes to task the critical importance of conducting systematic theory-guided empirical research to examine the validity of arguments that international monetary cooperation could be highly counterproductive. This book combines various methods - formal, quantitative, and qualitative - to study the theories of counterproductive monetary cooperation by focusing on the cooperative episodes among the major industrial countries - the United States, Japan, and Germany. For the first time, this book presents all theories of counterproductive cooperation in one place, subjects them to systematic, empirical scrutiny in the light of the experience of G-3 (U.S., Germany, and Japanese) cooperation since the 1970s, and suggests policy recommendations in the light of the findings.

As European integration continues, the future of EMU becomes ever more important. Can EMU help create an integrated European community, or will it prove a hindrance to the EU project? This book brings together the experts in the area to provide an interdisciplinary perspective on the issues expected to face EMU over the next few decades.

This book focuses on various important aspects of monetary policy such as the final objective of monetary policy, the position of the central bank, the design and implementation of monetary policy, the relationship between monetary policy and exchange rate regimes, and the consequences of financial reforms in Central and Eastern Europe and in Latin America. A Framework for Monetary Stability begins with introductions by President W. Duisenberg (DNB) and Vice Chairman D. Mullins, Jr. (Federal Reserve Board). Furthermore, twelve contributions discuss and analyse theoretical, empirical and institutional issues of monetary policy and central banking in Europe and America as well as in other countries. Contributors are reputed policymakers such as C. Freedman (Bank of Canada), J. de Beaufort Wijnholds and L. Hoogduin (DNB), O. Issing (Deutsche Bundesbank), A. Crockett (Bank of England), M. GuitiAn (IMF) and A. Icard (Banque de France). Also, prominent academics like professors S. Fischer (MIT), A. Cukierman (Tel Aviv), B. Friedman (Harvard), M. de Cecco (Rome) and F. Giavazzi (Bocconi), R. Layard (LSE) and R. Dornbusch (MIT) have made contributions. The book ends with a general report by S. Eijffinger (CentER). The collection of papers and proceedings will be of outstanding interest to anyone who is professionally involved with monetary policy and central banking.

This book assesses how EU economies have fared in their project of economic and monetary union. Drawing on data for all fifteen member countries, it takes the Spanish economy as a point of departure to compare their gains and losses. It also considers the implications for the welfare state, enlargement towards Eastern Europe and the political integration of Europe.

This book identifies the likely causes of high inflation and assesses the available policy options for preventing or curing it. The approach consists of making hypotheses about the economic motivation of individuals, developing a model assessing the results.

Globalization of capital markets has received new momentum and it will continue to be of major importance for the years to come. Partly, the increasing integration of financial markets and the rise of foreign direct investment is a consequence of world trade expansion. But in addition to this underlying trend, the worldwide collapse of socialist systems and the opening up of big economies like India and China have fuelled the development of globalized capital markets. This book takes stock of recent developments with emphasis on emerging capital markets.