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The explanation of high and persistent unemployment in Europe in the
1980s is a topical policy issue among economists and policy-makers
especially when contrasted to the experience of the United States. In
the first article, Dennis Snower shows how the `insider-outsider' theory
may help explain cross-country differences in labour market behaviour
and lead to specific policy responses. Participants at a CEPR workshop
discussed proposals for a regime of target zones for exchange rates. The
Bulletin also contains reports of lunchtime meetings on interwar
unemployment in international perspective, high public debt in Italy,
and alternative proposals for international monetary reform. Dennis Snower argues that the market power of incumbent workers and firms may help explain the persistence of high unemployment in some European countries. He focuses on cross- country differences in responses to shocks. Exchange Rate Target Zones The Centre held a workshop to discuss the theoretical and empirical modelling of target zones. Interwar Unemployment The interwar years provide a rich body of data on the nature and causes of unemployment, Barry Eichengreen told a June lunchtime meeting. A new CEPR book showed the importance of analysing data at the microeconomic level and from an international perspective. Environmental Noise Pollution Ian Diamond called for improved modelling of the economic costs and benefits of noise control. Italian Public Debt Luigi Spaventa launched a new CEPR volume on the Italian experience of high public debt. Market perceptions were a key factor in determining the sustainability of government deficits. International Monetary Regimes At a July meeting, Marcus Miller examined three proposals for managing exchange rates. A regime of `disciplined floating' may be the most likely option, he argued. Discussion Papers Nicholas Crafts examines the reasons for the decline in UK fertility rates between 1870 and 1939. Papers by Alberto Alesina and Guido Tabellini and by Patrick Minford explore how the political process can influence economic policy choices. Paul Johnson, in papers with Jane Falkingham and with Peter Scott, assesses the consequences for welfare expenditures of the growing elderly population. George Alogoskoufis describes the application of `two-sector' models to open economy macroeconomics. Papers by Tullio Jappelli and Marco Pagano and by Anindya Banerjee and Timothy Besley consider imperfections in markets for consumer credit. Carlo Carraro and Francesco Giavazzi find that the interactions between policy-makers and the private sector do not eliminate the gains from policy coordination between national policy-makers. Nick Bosanquet proposes a new, cohort-based control system for UK public expenditure. Willem Buiter investigates the fiscal policy constraints faced by LDC governments implementing stabilization and structural adjustment policies. Patrick Minford discusses `natural rate' explanations of unemployment. |