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This issue of the Bulletin features a report of a major research
project on `Economic Integration in the Enlarged European Community'.
The project examined how the double shock of EC membership and the
single market would affect the economies of Greece, Spain and Portugal,
and the consequences this Southern extension would have on the diversity
and coherence of the Community itself. The Bulletin also reports the
second meeting of the European Financial Markets Network, a workshop on
currency substitution, and lunchtime meetings on the growth effects of
1992, international policy coordination, childcare subsidies, and the
enlarged European car market. CEPR held the final conference of a project on `Economic Integration in the Enlarged European Community' in Delphi. Participants discussed constraints on national macroeconomic policies as Europe proceeds towards a single market and monetary union; the effects of 1992 and EC enlargement on industrial competitiveness and location; and mechanisms to assist poorer regions. There were also detailed country studies of Greece, Spain and Portugal, conducted by teams of researchers under the auspices of the project. Financial Markets The second meeting of the European Science Foundation Financial Markets Network, administered by CEPR, was held in Fontainebleau in October. It was devoted to `The Regulation of Banking and Financial Markets'. Currency Substitution Participants at a London workshop on `Money Demand and Currency Substitution' discussed explanations of the demand for different currencies and their consequences for currency substitution after the liberalization of EC financial markets. 1992 Richard Baldwin told a lunchtime meeting that previous estimates had understated the gains to EC output and growth from completion of the single market. 1992 would increase the returns to investment and so boost capital formation. International Policy Coordination Large external imbalances were the most serious problem facing the world economy, according to Jacob A Frenkel. He spoke at a meeting to mark the publication of a CEPR book on Macroeconomic Policies in an Interdependent World. Women's Employment Siv Gustafsson argued that Sweden's `family-friendly' welfare and employment policies, in particular public provision of subsidized childcare, had been instrumental in inducing high rates of female labour force participation. 1992 At a December lunchtime meeting, Alasdair Smith described how 1992 and the removal of Iberian tariffs on EC car imports would affect the market for cars in the Community. External trade policies were of particular significance. Discussion Papers In two papers, Stephen Thomas and Michael Wickens examine risk premia in the foreign exchange and equity markets. Merih Uctum and Michael Wickens develop a new model of exchange rate determination in economies with underdeveloped capital markets. Kenneth Kletzer identifies sources of inefficiency in post-default negotiations between LDC debtors and private sector creditors. Frederick van der Ploeg assesses the performance of floating exchange rates, the EMS and a monetary union in dealing with adverse shocks. In another paper, van der Ploeg develops a model of life-cycle consumption which distinguishes between intertemporal substitution and risk aversion as motives for saving. Willem Buiter and Vittorio Grilli dispute the claim that there is a basic paradox in the literature on fixed exchange rates. Dalia Marin uses cointegration techniques to establish a relationship between exports and productivity growth for four industrialized economies. Alexander Sarris argues that Greek adjustment to 1992 will be impeded by structural rigidities, notably a `dualistic' manufacturing sector. Paul Brenton and L Alan Winters find evidence of costly rationing after the imposition of quantitative restrictions on UK footwear imports. Frederick van der Ploeg examines how conclusions from two-country macro models are altered by explicitly modelling microeconomic behaviour. Damien Neven and Lars-Hendrik Röller suggest that intra-EC trade is now so high that integration is bound to proceed more slowly in future. Christopher Bliss examines determination of the common external tariff of an enlarging customs union. |